The Wall Street Journal reported on January 25 that in the past year, cryptocurrency companies seeking to go public have faced more scrutiny from the US Securities Regulatory Commission (SEC), while financial difficulties and failures have spread in this volatile industry.
A group of cryptocurrency-focused companies including Bullish Global, Circle Internet Financial and eToro Group have failed to obtain the SEC approval needed to go public. These companies are seeking to list on stock exchanges by merging with special purpose acquisition companies (SPACs). It’s another route to listing that was popular in 2020 and 2021 before increased regulation and market turmoil ended the SPAC boom.
Another cryptocurrency brokerage, Galaxy Digital Holdings Ltd, has faced multiple rounds of inquiries from SEC staff about its business after it filed its application documents to list on Nasdaq, according to people familiar with the matter. Galaxy does not employ a SPAC structure. The company had announced in March 2021 that it planned to list in the United States and hoped to pass the SEC’s review before the end of that year.
The SEC has no plans to prevent the companies from going public, the people said. But cryptocurrency firms believe the speed of the SEC’s scrutiny has hurt their listing efforts, especially after the collapse of a high-profile cryptocurrency and the bankruptcy of a large crypto hedge fund hit many cryptocurrency exchanges and lenders. The bankruptcy of cryptocurrency exchange FTX and the bear market in digital asset prices may keep that door closed.
Netease Technology 36Kr Titanium Media
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