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According to a new press release published on Dec. 5, USD Coin (USDC) issuer Circle announced the mutual termination of its proposed merger with special purpose acquisition company, or SPAC, Concord Acquisition. The deal was announced in July 2021 with a preliminary valuation of $4.5 billion and was then amended in February 2022 when Circle’s valuation ballooned to $9 billion. USDC is currently the second largest stablecoin in circulation, with a market cap of $43 billion. 

Under the terms of the agreements, Concord had until Dec. 10 to consummate the transaction or seek a shareholder vote for an extension. However, it appears that Concord chose to have the time limit lapse instead. As told by Circle CEO Jeremy Allaire:

“Concord has been a strong partner and has added value throughout this process, and we will continue to benefit from the advice and support of Bob Diamond and the broader Concord team. We are disappointed the proposed transaction timed out; however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important.”

Circle further reiterated that it “became profitable in the third quarter of 2022, with total revenue and reserve interest income of $274 million and net income of $43 million.” The company currently has $400 million in unrestricted cash.

While the stakeholders didn’t directly state the reason behind the deal’s fallout, the ongoing crypto winter has led to a spiral of downward revisions for many companies’ valuations. On top of that, SPAC mergers have also performed poorly, with the IPOX SPAC index benchmark falling over 40% since reaching all-time highs in February 2021. Likewise, Israeli cryptocurrency exchange eToro terminated its $10 billion SPAC merger this July after a downward revision to its valuation.