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DeFi and Credit Risk

SPACs were once the hottest way to get into the stock market on Wall Street, but the craze has died down due to a general market decline and new Securities and Exchange Commission restrictions.

If parties in existing transactions want to move forward, they'll have to reprice them to reflect current market comps, according to Peter Stoneberg, managing director of M&A company Architect Partners. "Overall, SPACs have been quite volatile and on a decreasing trend," Stoneberg added.

Forbes canceled its ambitions to go public via a SPAC at a $630 million value by merging with Hong Kong-based Magnum Opus Acquisition Ltd last Wednesday (OPA). Binance, a cryptocurrency exchange, had already made a $200 million strategic investment in Forbes as part of the planned merger.

Regulation

The SEC recently announced that it would adopt "specific disclosure rules with respect to, among other things, pay paid to sponsors, conflicts of interest, dilution, and the fairness of these business combination transactions" to improve investor protection.

According to the SEC's study, SPACs nearly doubled the amount they raised in such offerings from over $83 billion in 2020 to more than $160 billion last year. According to the SEC, SPACs were used in almost half of all initial public offerings during those years.

Participants in the SPAC face challenges, according to Stoneberg. According to him, the SEC is now becoming more cautious about the broader SPAC process, particularly crypto-related agreements.

Miners of cryptocurrency and capital

Cryptocurrency miners require a lot of money for data centers and rigs, but money is tight right now, according to Stoneberg.

"Right present, there isn't a lot of financing available for mining businesses or SPACs," he remarked. The market for private investment in public equity (PIPE) used to be "extremely busy," but it's now "very well dead."
Investors are keeping an eye on the following crypto SPAC deals:

- Circle, the USDC stablecoin's supporter, and its partnership with Concord Acquisition Corp. (CND). The sides came to a new deal with an initial outside date of Dec. 8, with the possibility of an extension to Jan. 31, 2023, if "certain circumstances" are met.

- 10X Capital Venture Acquisition Corp. II (VCXA) will acquire miner PrimeBlock in a deal scheduled to finalize in the second part of the year.

- Blue Safari Group Acquisition Corp. (BSGA) and Miner Bitdeer, in a recently expanded transaction.

- BitFuFu, a Bitmain-backed miner, and Arisz Acquisition Corp. (ARIZ), a Nasdaq-listed company slated to IPO in Q3.

- Miner Griid Infrastructure and Adit EdTech Acquisition Corp. (ADEX), which were scheduled to close in the first quarter.

- Thunder Bridge Capital Partners IV has partnered with Coincheck, one of Japan's leading cryptocurrency exchanges. The transaction is set to close in the second part of this year.

- eToro Group, an investment platform, and FinTech Acquisition Corp. V (FTCV). The contract will expire on June 30.

- Bullish, a cryptocurrency investing platform, and Far Peak Acquisition Corp. (FPAC), which just extended its outside termination date to July 8.

Apifiny Group and Abri SPAC I, a digital asset trading network, are slated to close in Q3.

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