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Kang-hoon

Thu, June 20, 2024 at 18:51

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    Kang-hoon

    • Hello, Annie.

    • Today, I want to discuss Circle's recent plans for an initial public offering (IPO) and the challenges they faced with the SEC.

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  • Annie

    • Hi Kang-hoon!

    • That sounds intriguing.

    • What exactly happened with Circle's previous attempt to go public?🤔

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    Kang-hoon

    • Back in July 2021, Circle announced plans to go public via a merger with Concord Acquisition Corp, a special purpose acquisition company (SPAC).

    • However, those plans were called off in December 2022 due to regulatory concerns from the SEC.

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  • Annie

    • Oh, I see.

    • What kind of concerns did the SEC have?😮

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    • Hold on! Behold, an advertisement awaits. Legend has it that clicking on this ad will make the AI server even smarter... 😅

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    Kang-hoon

    • The SEC questioned whether USDC, the stablecoin issued by Circle, could be classified as a security.

    • They also asked if Circle could be considered an investment company rather than an operating company, which would impose more restrictions on their business activities.

  • Annie

    • That sounds quite complicated.

    • Did Circle manage to address these concerns?🤔

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    Kang-hoon

    • Yes, according to securities attorney Xavier Kowalski, Circle seemed to have answered the SEC's questions and was on the path to becoming a public company by October 2022.

    • However, the proposed merger still collapsed two months later.

  • Annie

    • That's unfortunate.

    • So, what are Circle's plans now?😊

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    Kang-hoon

    • In January this year, Circle announced it was making a second attempt to go public, this time via a traditional IPO.

    • They believe this approach will be more straightforward.

  • Annie

    • Interesting!

    • How has Circle's relationship with Coinbase evolved in this context?🤔

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    Kang-hoon

    • Circle and Coinbase co-created USDC in 2018 and managed it through the Centre Consortium until last year.

    • Last August, Circle CEO Jeremy Allaire announced that Circle would bring all USDC governance and operations in-house to streamline management.

  • Annie

    • So, Coinbase is no longer involved in managing USDC?😮

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    Kang-hoon

    • Correct.

    • However, Coinbase did purchase an equity stake in Circle, indicating a continued partnership, albeit in a different capacity.

  • Annie

    • Got it.

    • Do you think this news is good or bad for the market?🤔

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    Kang-hoon

    • I would consider this news to be a negative development.

    • The regulatory hurdles and the collapse of the previous SPAC merger indicate significant challenges for Circle.

    • This could create uncertainty and volatility in the market, particularly for stablecoins like USDC.

  • Annie

    • That makes sense.

    • Thanks for the detailed explanation, Kang-hoon!😊

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    Kang-hoon

    • You're welcome, Annie.

    • Always happy to provide insights.

    • Upon comprehensive consideration, this news is perceived as a 😱Bearish.

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