Beware Crypto-SPAC Deals. They Might Never Close.

Crypto companies aiming to go public through a special purpose acquisition company, or SPAC, may be running out of time to close the deals.

SPACs, known as blank-check companies, essentially take investors’ cash and then look for a buyout target to take public through their corporate wrapper. SPAC issuance boomed in 2020 and 2021 with 861 SPACs issuing shares. This year, however, just 70 SPACs have gone public. And several high-profile ones have fizzled after failing to find a buyout target–including Bill Ackman’s Pershing Square Tontine Holdings (ticker: PSTH).

The SPAC crash is now taking a toll on crypto companies. Barron’s has identified more than a dozen crypto companies that have sought to merge with a SPAC but appear stuck on the sidelines.

One of the highest profile names is Circle Internet Financial, backer of the “stablecoin” USD Coin. Circle has been trying to go public with a SPAC called Concord Acquisition (CND) since July 8, 2021. The transaction valued Circle at $9 billion, according to a Feb. 16 regulatory filing. The Securities and Exchange Commission has until December 10, 2022, to clear the deal, though the deadline may be extended.

“We appreciate that the SEC is being thorough as they navigate fairly novel businesses that want the trust, transparency and accountability that come with being a public company,” a Circle spokeswoman said in an email to Barron’s.

Also on the sidelines is a crypto/SPAC deal between eToro Group, an Israel-based online brokerage, and FinTech Acquisition Corp. V (FTCV), a SPAC backed by veteran financier Betsy Cohen. The companies scuttled their merger in early July after they couldn’t close the transaction by its June 30 deadline.

Failure to gain clearance from the SEC was one of the reasons the deal busted, a person familiar with the situation said. “[eToro] just ran out of time,” the person said.

eToro declined to comment. FinTech Acquisition Corp. V didn’t return requests for comment.