Bullish’s SPAC Dreams on Hold: SEC Delays NYSE Listing – What’s Next?

Big news in the crypto world! Bullish, the crypto exchange backed by Block.one, is hitting pause on its plans to go public on the New York Stock Exchange (NYSE). You might be wondering, what’s the hold-up? Well, it all comes down to the Securities and Exchange Commission (SEC). Let’s dive into what this means for Bullish, the broader crypto market, and the increasingly complex world of SPAC mergers.

What’s Happening with Bullish and its SPAC Merger?

For those just catching up, Bullish Exchange, a platform designed for institutional crypto trading, announced last year its intention to become a publicly listed company. But not through a traditional IPO (Initial Public Offering). Instead, Bullish opted for a quicker route – a merger with a Special Purpose Acquisition Company (SPAC). The chosen SPAC partner? Far Peak Acquisition Corp.

Think of a SPAC like a blank check company. It raises money in an IPO with the sole purpose of acquiring an existing private company and taking it public. In July, Bullish revealed its agreement to merge with Far Peak, a deal valued at a whopping US$9 billion. This move was set to bring Bullish onto the NYSE, a major milestone for a crypto exchange.

According to the initial plan, Thomas Farley, Far Peak’s chairman and a former president of the New York Stock Exchange itself, was expected to take the reins as the chairman of the publicly listed Bullish. Talk about industry experience!

However, as the saying goes, “the best-laid plans of mice and men often go awry.” In this case, the SEC is playing a crucial role, and its permission is still pending. This regulatory hurdle has led to the postponement of Bullish’s NYSE debut.

Bullish has postponed its intended backdoor listing on the New York Stock Exchange (NYSE). That’s, through a proposed special purpose acquisition company (SPAC) agreement. Of course, with Far Peak Acquisition Corp., as the merger is still awaiting SEC permission.

Last July, Bullish, the operator of the Bullish exchange, revealed that it had entered into a business combination agreement with Far Peak to become publicly traded on the NYSE.

After the US$9 billion acquisition, Far Peak chairman Thomas Farley. Who’s, a former president of the New York Stock Exchange, is likely to oversee the company.

SPAC listings have been postponed by a rising number of significant crypto businesses. That’s, including USDC stablecoin issuer Circle and Israeli crypto and multi-asset trading site eToro.

Bullish has had unprecedented trading volume of over US$14 billion since its introduction in November for institutional traders in licensed jurisdictions, with annualized monthly trading revenue of US$97 million in February.
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Why the SEC Delay? Is it a Red Flag for Crypto SPACs?

The million-dollar question is: why the delay? While official reasons from the SEC are usually not immediately public, we can speculate based on broader trends and regulatory landscapes.

Here are some potential factors contributing to the SEC’s scrutiny and the resulting delay:

• Increased SEC Scrutiny of SPACs: SPACs have been under the SEC’s microscope lately. Regulators are paying closer attention to the disclosures, projections, and overall structure of SPAC deals, especially after a boom in SPAC activity. They want to ensure investor protection and market integrity.
• Crypto Industry Under Regulatory Lens: The cryptocurrency industry, as a whole, is facing increasing regulatory pressure worldwide. The SEC is actively working to define its role in regulating crypto assets and related businesses. Any crypto company seeking public listing, particularly through a relatively newer mechanism like SPACs, is likely to face thorough examination.
• Complexity of Crypto Exchanges: Crypto exchanges are complex businesses operating in a rapidly evolving legal and technological environment. The SEC needs to understand Bullish’s operations, security measures, compliance protocols, and risk management frameworks before giving the green light for public listing.
• Due Diligence and Investor Protection: The SEC’s primary mandate is to protect investors. In the case of Bullish and Far Peak merger, the SEC would be conducting rigorous due diligence to ensure all necessary disclosures are in place and that investors are adequately informed about the risks and opportunities associated with investing in a publicly traded crypto exchange.

Bullish Joins a Growing List: Are Crypto SPACs Losing Steam?

Interestingly, Bullish isn’t alone in facing SPAC-related delays in the crypto space. The article mentions two other prominent crypto companies experiencing similar situations:

• Circle: The issuer of USDC, a major stablecoin, also announced plans to go public via SPAC. Their merger with Concord Acquisition Corp has also faced delays.
• eToro: This popular Israeli crypto and multi-asset trading platform had a SPAC merger agreement with FinTech Acquisition Corp. V, which was also postponed and eventually terminated.

This trend raises a critical question: Are crypto SPACs losing their appeal, or are they simply facing increased regulatory hurdles?

It’s likely a combination of both. The initial frenzy around SPACs has cooled down, and regulators are becoming more cautious. For crypto companies, which operate in a relatively nascent and often ambiguous regulatory landscape, the path to public markets via SPACs might be proving more challenging than initially anticipated.

Bullish by the Numbers: Impressive Trading Volume Despite Delays

Despite the regulatory delays, Bullish has demonstrated significant traction in the market. Let’s look at some impressive numbers mentioned in the original snippet:

• US$14 Billion+ Trading Volume: Since its launch in November for institutional traders in specific jurisdictions, Bullish has facilitated over US$14 billion in trading volume. This is a substantial figure, especially considering it’s a relatively new exchange focused on institutional clients.
• US$97 Million Annualized Monthly Trading Revenue: In February alone, Bullish generated an annualized monthly trading revenue of US$97 million. This highlights the platform’s revenue-generating potential and its ability to capitalize on crypto market activity.

These figures suggest that Bullish has a strong product and is attracting significant institutional interest. The postponement of the SPAC merger, while a setback, doesn’t diminish the underlying performance and potential of the Bullish exchange.

What Does This Mean for the Future of Bullish and Crypto SPACs?

The SEC delay for Bullish’s SPAC merger, along with similar situations for other crypto firms, signals a potential shift in how crypto companies approach public listings. Here are some possible implications:

• Longer Timelines for Crypto SPACs: Crypto companies considering the SPAC route should anticipate longer timelines for regulatory review and approval. Thorough preparation, robust compliance frameworks, and proactive engagement with regulators will be crucial.
• Increased Scrutiny and Disclosure: The SEC’s focus on SPACs and crypto means companies will need to be prepared for intense scrutiny and detailed disclosure requirements. Transparency and investor protection will be paramount.
• Potential Shift Back to Traditional IPOs?: The increased regulatory hurdles for crypto SPACs might lead some companies to reconsider traditional IPOs as a potentially more predictable, albeit longer, path to the public markets.
• Maturation of the Crypto Market: While delays can be frustrating, increased regulatory scrutiny can also be seen as a sign of the crypto market maturing. Clearer regulatory frameworks, even if they take time to develop, can ultimately foster greater investor confidence and long-term stability in the crypto space.

In Conclusion: Patience is Key in the Crypto SPAC Saga

Bullish’s SPAC postponement is a significant development, reflecting the complex interplay between the rapidly evolving crypto industry and regulatory oversight. While the delay might be disappointing for Bullish and its investors, it’s not necessarily a dead end. The strong trading volume of Bullish demonstrates its market appeal, and the company still has a clear path to becoming a publicly traded entity, albeit one that requires navigating a more cautious regulatory landscape.

For the broader crypto market, this situation serves as a reminder that regulatory engagement and compliance are becoming increasingly important. The era of rapid, lightly regulated growth is giving way to a more mature phase where collaboration with regulators and adherence to established financial market norms will be essential for sustainable success. So, while Bullish’s NYSE debut is on hold, the crypto SPAC story is far from over – it’s simply entering a new chapter that demands patience, persistence, and a proactive approach to regulatory compliance.

Stay tuned for more updates as the Bullish SPAC saga unfolds and as the regulatory landscape for crypto continues to evolve!

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