Crypto IPO Listings Wither Under SEC Spotlight

Cryptocurrency firms are facing new levels of government scrutiny as they try to go public.

At least three companies — Bullish Global, Circle Internet Financial, and eToro Group — have failed to win approval from the Securities and Exchange Commission (SEC) in their bids to list on the stock market, the Wall Street Journal (WSJ) reported Tuesday (Jan. 24).

Sources told the WSJ that the SEC didn’t intend to prevent the companies from going public. However, crypto firms believe the pace of the commission’s review hindered the process, especially after the ongoing crisis in the crypto market.

The report noted that when Coinbase went public in 2021, it received three letters from the SEC with questions. On the other hand, Bullish got more than 10 letters, sources said.

“Anyone bringing a crypto deal to the SEC should realize there is going to be a lot of friction,” Scott Kimpel, a partner at law firm Hunton Andrews Kurth, told the WSJ.

Circle announced in December it was postponing its special purpose acquisition company (SPAC) merger with Concord Acquisition Corp, PYMNTS wrote.

Circle co-founder and CEO Jeremy Allaire said at the time that becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important.”

Bullish announced it was ending its plans to go public a few weeks later, abandoning a proposed SPAC merger with Far Peak Acquisition.

“Our quest to become a public company is taking longer than expected, but we respect the SEC’s ongoing work to lay new digital asset frameworks and clarify industry-specific disclosure and accounting complexities,” Bullish Chairman and CEO Brendan Blumer said at the time.

As PYMNTS reported, the two companies determined they were not prepared to meet the Dec. 31 deadline for Far Peak’s board to vote on the merger.

Last year was a bad year for SPACs in the FinTech sector overall, PYMNTS’ data showed, with the pace of such deals slowing to single digits.

Meanwhile, the cryptocurrency industry is facing calls for more scrutiny in the U.S. and abroad. Last week, European Commissioner Mairead McGuinness called on the rest of the world to follow the European Union’s example as it became the first major jurisdiction to regulate crypto.

“If we fail to do that global approach, we’re going to find that there’s more and more problems,” McGuinness told CoinDesk. “The technology is borderless.”