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The crypto exchange Bullish is trying to persuade the SEC that it should be allowed to go public.
Courtesy of Bullish
Crypto markets are in disarray, but that doesn’t appear to be stopping another exchange from trying to go public through a special purpose acquisition vehicle, or SPAC.
Far Peak Acquisition
(ticker: FPAC) has tried for over a year to close its merger with Bullish, a crypto exchange that aims to compete against rivals like
Coinbase Global
(COIN), FTX, and Binance. US.
The SPAC resubmitted a registration statement with the Securities and Exchange Commission on Friday, filling a 700-page document to try to persuade the SEC to approve the deal.
“We’ve worked through the vast majority of SEC comments,” said Far Peak CEO Thomas Farley, a former president of the New York Stock Exchange. “We’re in an advanced position,” he added, speaking with Barron’s on the sidelines of the SALT conference on Monday.
The deal values Bullish’s equity at $9 billion, according to the company. Investors include
BlackRock
(BLK), Cryptology Asset Group and
Galaxy Digital Holdings
(GLXY.CA), a crypto financial services company headed by Michael Novogratz.
Yet getting the SEC to sign off on the deal still seems like a tall hurdle. Several other crypto/SPAC deals have crumbled, partly due to SEC opposition. A selloff in the crypto market and faltering demand for high-risk crypto companies hasn’t helped.
The SEC didn’t return requests for comment.
Farley said he was optimistic the transaction would go through by the end of this year. Far Peak and Bullish have until Dec. 31 to complete the merger, according to a June 29 statement.
Far Peak is one of several SPACs that have tried to merge with crypto companies since the start of 2021.
They include
Northern Star Investment Corp
II’s (NTSB) pact to merge with Apex Clearing Holdings;
FinTech Acquisition Corp
.
V’s (FTCV) agreement to combine with eToro Group, a digital trading platform; the merger of
Concord Acquisition
’s
(CND) with Circle Internet Financial, backer of the “stablecoin” USD Coin; and Far Peak’s agreement to combine with Bullish.
Both Apex and eToro couldn’t get their mergers cleared by the SEC and called off their deals. Concord and Circle still intend to merge, with a deadline for the SEC to issue a decision by Dec. 10, according to regulatory filings.
Galaxy had planned to merge with digital-asset custodian BitGo on a U.S. exchange. That deal also died and ended up in a lawsuit with BitGo suing Galaxy for terminating the acquisition.
If Far Peak pulls off its merger with Bullish, Farley would become CEO of the combined company. Farley, who is also the incoming CEO of Bullish, said the exchange was well-capitalized with more than $4 billion in crypto assets on its balance sheet, primarily held in Bitcoin and Ether.
The company could use those assets to invest in more products and do acquisitions, he said, regardless of whether the SEC signs approves the merger.
“If Bullish doesn’t go public, it’s still a great business,” he said.
Yet the SEC, under Chair Gary Gensler, may be reluctant to allow another crypto exchange to go public. Gensler has repeatedly said he believes most tokens would qualify as securities under existing laws, and has called for exchanges to register with the SEC—rather than to continue operating as state-licensed money-transfer businesses.
Farley doesn’t see the legal issues being settled without Congress stepping in with new laws or guidelines.
“The most important thing I would like to see come out of this regulatory dialogue is clarity,” he said. “I don’t expect that clarity soon. It will require an act of Congress to clarify definitively.”
Shares of Far Peak were trading around $9.87 on Wednesday, close to the $10 floor price at which investors could get their money back if the deal falls apart.
Write to Luisa Beltran at luisa.beltran@dowjones.com