Crypto deals hiding in plain sight
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A blank-check company led by crypto investors announced a deal that, at first glance, looks very uncrypto.
Why it matters: Dig deeper, and it looks like an epic troll or a Trojan horse of a deal.
Context: Listing on public exchanges via a special purpose acquisition company, or SPAC, has largely fallen out of favor following scrutiny from the SEC. (Part of the issue was how they performed after listing.)
- Stablecoin issuer Circle and crypto exchange Bullish (the company that bought CoinDesk) kiboshed their mergers when it became apparent that the route to the public market had significant hurdles.
Driving the news: When Blockchain Coinvestors Acquisition Corp. I (BCSA) announced its planned merger with private-equity platform Linqto in April, it was largely unnoticed by the crypto community.
- There's no coins nor blockchain here.
- What Linqto does, is enable accredited investors to buy shares in private-market and pre-IPO companies.
Between the lines: Pre-IPO companies, including Ripple.
- That's the company behind XRP that's been in a legal battle with the SEC since December 2020, after the regulatory agency accused Ripple, its chief Brad Garlinghouse and cofounder Chris Larsen of raising over $1.3 billion through what the SEC alleges are unregistered securities offerings.
💭 Our thought bubble: Linqto isn't a crypto company, but it does offer a way for certain people to invest in it.
- Maybe that's why the deal has largely flown under the radar of Crypto Twitter, though, some of the more milquetoast crypto-SPAC mergers never really landed with degens.
What we're watching: The deal is expected to close in the second half of this year, with an extended deadline of Nov. 15 according to merger filings.
- There's another similar crypto/non-crypto deal like the Coinvestors-Linqto's on the table — SK Growth Opportunities Corp.'s February announced merger with stock trading app Webull.
- 👆 There's neither crypto nor coins anywhere on its investor presentation deck... because Webull moved crypto off its app to a separate one last year.
The big picture: Meanwhile, crypto companies that have listed via SPACs, are in the throngs of new possible deals — Core Scientific recently rejected an unsolicited buyout, and Bakkt, which is sort of a crypto company, is reportedly weighing a sale or a breakup.
