This is a weekly feature that will review your week in crypto, blockchain, and Web3, offering insights and analysis. See our previous column here.

It is no secret that the relationship between the National Stock Market Commission and the crypto industry is akin to a wild cat and dog.

However, an interesting The Wall Street Journal report It further illustrates that frayed relationship and the fact that the SEC will not make it easy for cryptocurrencies to get out of their tailspin.

According to the story, the The SEC did not approve the public listing of cryptocurrency-focused companies, such as overall bullish, Financial Internet Circle Y eToro. All the companies were seeking to go public through mergers with special purpose acquisition companies.

While the SEC did not stop either company from merging, the slow review process and extensive questioning appeared to hurt their listing efforts, according to the report.

The circle situation

based in boston CircleThe effort to go public certainly caught our attention before finally coming to its long and tortuous conclusion last month.

Circle’s proposed merger with blank check firm Concord, which is backed by former barclays chief bob diamondit has been own long and winding history.

The company, an issuer of USD Coin, a type of stablecoin, announced in July 2021 that it would merge with Concord in a deal that would value the company at $4.5 billion. However, USD Coin circulation quickly doubled, and in February of last year, Circle terminated its previously announced merger agreement and agreed to new terms that doubled the valuation of the crypto company to $9 billion.

That deal was expected to close last month, but instead, the company canceled its proposed merger deal.

According to the report, the SEC raised more than 100 questions with Circle’s disclosures about the SPAC agreement.

Again, none of this is a surprise, but it is significant. Venture capitalists and other institutional investors are likely to be more cautious than ever when it comes to backing crypto startups. If it becomes clear that one of the paths to a liquidity event is blocked by an agency like the SEC, the appetite to invest in the space becomes even less.

In a market where it will likely be difficult to raise funds for crypto-focused startups, the SEC’s actions may increase that level of difficulty even a bit more.

Other reading:

Illustration: Dom Guzmán