Tag: Spac

SPAC CFO Sentenced to Prison for Embezzling $5M

by Blockchain News

Cooper Morgenthau, the former CFO of African Gold Acquisition Corporation (AGAC), has been sentenced to three years in prison for embezzling $5 million from three different Special Purpose Acquisition Companies (SPACs). The sentencing comes as a result of Morgenthau’s use of the embezzled funds to trade cryptocurrencies and meme stocks, leading to significant losses. In addition to his prison sentence, Morgenthau has been ordered to forfeit $5.1 million and pay restitution of the same amount.

The embezzlement scheme began in June 2021 and continued until August 2022, during which time Morgenthau wired approximately $1.2 million from African Gold to his personal accounts for trading purposes. He traded equities and options of cryptocurrencies and meme stocks, leading to almost all of the funds being lost. Following the losses, he then provided falsified documents to accountants and an auditor at African Gold ahead of its public filing with the U.S. Securities and Exchange Commission (SEC). This led to “material misstatements” in the company’s public financial records.

Moreover, Morgenthau raised an additional $4.7 million from private investors in a separate SPAC, based on the fraudulent claim that the money would be used to launch yet another SPAC. Unfortunately for the investors, Morgenthau used the freshly-raised capital to cover his losses at African Gold and continue further trading of cryptocurrencies and meme stocks.

The malpractice was discovered by African Gold in August 2022, resulting in Morgenthau being fired, and the SEC being informed. Subsequently, Morgenthau pled guilty to one count of wire fraud on January 3.

The case sends a clear message to the SPAC community that fraud in the markets will not be tolerated. U.S. Attorney Damian Williams said in a statement, “With today’s sentencing of Cooper Morgenthau, SPAC promoters have been sent a message that fraud in the SPAC markets will be punished, and greed on Wall Street will be met with serious consequences.”

SPACs have become increasingly popular over recent years, and this case highlights the importance of proper oversight and compliance in the sector. While SPACs offer companies a faster and less complicated path to going public, they also come with risks. Embezzlement and fraud can damage the reputation of the entire industry, leading to regulatory scrutiny and increased oversight. As such, it is essential for SPACs and their investors to take proper precautions and perform proper due diligence when selecting management teams and making investment decisions.

Source

Tagged : / / / / /

Japan’s Crypto Exchange Coincheck to List on NASDAQ Stock Market in July 2023

by Blockchain News

Coincheck, a major crypto exchange in Japan, announced on Friday plans to complete its listing on Nasdaq via a merger with special purpose acquisition company (SPAC) Thunder Bridge Capital Partners IV on July 2, 2023.

Coincheck said the plans to pursue a public stock offering in the US through Nasdaq would give the firm access to the country’s lucrative capital markets.

The exchange said that the move would enable it to expand its crypto asset business by accessing the U.S. capital markets, gaining exposure to global investors, and recruiting talent to realize its growth strategy. Coincheck majority owner Monex Group stated in a U.S. Securities and Exchange Commission (SEC) filing.

Coincheck announced its public-listing ambitions in March of this year. During that time, its merger with Thunder Bridge Capital was valued at $1.25 billion.

SPACs were the hottest way crypto firms use to hit the public market in 2020 and 2021, but the craze has cooled this year amid an overall market downturn along with added Securities and Exchange Commission (SEC) regulations.

Since June this year, the SEC is now more cautious about the overall SPAC process, especially crypto-linked deals, to enhance investor protection.

SPACs overall have been very volatile and on a downward trajectory this year. Crypto companies aiming to go public through SPACs may be running out of time to close the deals, as they appear stuck on the sidelines after failing to find a buyout target.

Circle Internet Financial, the backer of the “stablecoin” USD Coin, has been trying to go public with a SPAC called Concord Acquisition (CND) since July last year.

Also, on the sidelines is a crypto/SPAC deal between eToro Group, an Israel-based online brokerage, and FinTech Acquisition Corp. V (FTCV), a SPAC backed by veteran financier Betsy Cohen. The companies canceled their merger in early July after they couldn’t close the transaction by its June 30 deadline. Failure to gain clearance from the SEC was one of the reasons the deal went bust.

Image source: Shutterstock

Source

Tagged : / / / /

Blockchain Startup W3BCloud to Go Public via SPAC Deal

by Blockchain News

Blockchain cloud infrastructure service provider W3BCloud is set to go public via a Special Purpose Acquisition Company (SPAC) dubbed the Social Leverage Acquisition Corp I (SLAC).

CLO22.jpg

According to the transaction document, the SLAC vehicle is being sponsored by Social Leverage, a leading early-stage VC. The proposed funds to be raised via the SPAC are pegged at about $100 million.

Going public through a special purpose acquisition company is an alternative route designed for startups looking to raise funds and trade on public bourses. 

They are generally a faster-track option for promising startups, provided they have a matching business design with their sponsoring SPACs. Per the proposed merger deal, W3BCloud is on track to be listed on the New York Stock Exchange (NYSE).

W3BCloud is one of the promising startups that hope to be the go-to cloud infrastructure provider for the emerging Web3.0 ecosystems. Currently, the startup ticks the box for providing a quality supply chain and access delivery through its integration of AMD technology. The startup’s core partnership also extends to ConsenSys, which gives it software and protocol insights.

Over the years, the development of Web3.0 focused on cloud infrastructure providers has progressed in a limiting way. This is because crypto-based startups hardly patronize these decentralized cloud providers as preference remains largely for centralized services like Microsoft Azure and Amazon Web Services (AWS).

W3BCloud aims to change the narrative, and it is developing the right data centres, most of which are in the United States. The firm is exploring avenues to bolster its infrastructure with the funds raised and the remaining $345 million cash it has in its trust.

W3BCloud is riding on the strength of both its founders and the expertise of the veterans from Social Leverage. With the clamour for Web3.0 soaring remarkably this period, W3BCloud is hopeful it has a large market potential for its products.

Image source: Shutterstock

Source

Tagged : / / / /

eToro Cancels SPAC deal with FinTech Acquisition Corp. V. Company

by Blockchain News

Social investing network eToro Group announced Tuesday that it has cancelled its planned public listing through a merger with FinTech Acquisition Corp. V. SPAC (special purpose acquisition company).

eToro said that the closing conditions agreed upon by the two firms when the merger was proposed in March last year have not been met.

The two firms announced the proposed merger in March 2021, but further agreements and amendments have failed to meet the closing conditions within the enshrined timeframe.

As a result, the two companies have not been able to complete the transaction deadline by June 30, which prompted the cancellation of their planned merger for an initial public offering (IPO).

When the two parties announced their plan in March last year, eToro stated that it was expecting a valuation of $10.4 billion. On the other hand, FinTech V Chairman Betsy Cohen cited the strengths of eToro as a social trading enterprise outside the US and its multiple income streams. In other words, the merger entity was supposed to create a combined entity worth $10.4 billion, reflecting an implied business value for eToro of an estimated $9.6 billion.

However, the latest meeting between the two firms has brought new revelations. Betsy Cohen, Chairman of Fintech V, talked about the development and said: “The transaction has been rendered impracticable due to circumstances outside of either party’s control.”

eToro CEO Yoni Assia, also commented: “While this may not be the outcome that we hoped for when we started this process, eToro’s underlying business remains healthy, our balance sheet is strong and will continue to balance future growth with profitability.”

Since the two firms mutually agreed upon the decision, there is no termination fee required by either party for payment.

Market Plunge Affecting SPAC Deals

The cancellation of the eToro SPAC deal comes at a time when crypto firms that have been making attempts to go public since the bull market last year have remained stuck in lengthy ups and downs with the US Securities and Exchange Commission (SEC).

Efforts by crypto firms to merge with blank-check companies have been facing increased scrutiny from the accountants at the SEC because crypto-assets raise unique bookkeeping issues.  

Besides that, dates for closing multibillion-dollar deals involving crypto firms (such as eToro, Bullish Global, and Circle Internet Financial Limited, among others) going public have been postponed several times and even terminated because of the bad market environment.

SPACs were the hottest way in which Wall Street pursued to hit the public market. However, the craze has declined amid the current market crash together with SEC’s demanding regulations.

Due to the current extreme market conditions, SPACs have been volatile and are on a downward trajectory. This implies that parties involved in SPAC deals are forced to reprice them to reflect the current market conditions. The SEC has also been more cautious about the SPAC process, especially crypto-related deals.

Image source: Shutterstock

Source

Tagged : / / / /

Aura FAT SPAC Pulls $115m in IPO, Planning to Merge Crypto Firm

by Blockchain News

Cayman Islands incorporated Special Purpose Acquisition Company (SPAC) Aura FAT Projects Acquisition Corp has announced its successful Initial Public Offering (IPO) on the Nasdaq Exchange where it raised $115 million. 

AURA2.jpg

As announced by the company, the public offering featured as many as 10,000,000 units given at $10.00 per unit. The IPO also saw the firm give out its Class A ordinary share and one redeemable warrant entitling the holder thereof to purchase one Class A ordinary share at a price of $11.50 per share. 

As a SPAC, Aura Fat is entitled to raise funds via this method, after which it can then complete a merger with any company within its line of focus.  Aura Fat said its approach to merge “will not be limited to a particular industry or geographic region, the company intends to focus its search on new emerging technology companies with an acute growth potential in Southeast Asia and Australasia in sectors such as the Web 3.0, blockchain, cryptocurrency, digital ledger, e-gaming, and other new financial technology and services sectors.”

A Growing Trend in the Blockchain Ecosystem

While SPAC mergers are not so common in the digital currency ecosystem nowadays as it is popular amongst Wall Street startups, a number of crypto-linked platforms have gone public through this means. One of the most prominent examples is the public debut of the Bakkt digital asset platform through a merger with VPC Impact Acquisition last year.

Additionally, startups like Core Scientific and Griid crypto mining firms have also gone public through mergers with different SPAC in July and December 2021 respectively.

Image source: Shutterstock

Source

Tagged : / / / /

Japan’s Coincheck to List on Nasdaq via SPAC Merger with $1.25 Billion Valuation

by Blockchain News

Coincheck, a major crypto wallet and exchange service in Japan, announced Tuesday that it plans to go public in the U.S. by merging with blank-check firm Thunder Bridge Capital Partners IV Inc.

Webp.net-resizeimage - 2022-03-23T153252.658.jpg

The merger is scheduled to be completed in the second half of 2022, which will see the combined entity listed on the Nasdaq Global Select Market under the ticker “CNCK.”

The proposed transaction is set to give the combined entity a valuation of about $1.25 billion.

Before expenses and assuming there are no redemptions by shareholders, Thunder Bridge will offer $237 million in cash to the combined company.

Coincheck is 94.2% owned by Japanese online brokerage Monex Group Inc, which will retain all the existing entities at closing, representing ownership of about 82% in the new entity.

Once the closing is done, Gary Simanson, the CEO and President at Thunder Bridge, will become the CEO of the combined company.

Building Innovation Capability for Service Delivery

Founded in 2014 and headquartered in Tokyo, Coincheck is a marketplace for buying and selling cryptocurrencies and an exchange for digital assets like non-fungible tokens. The exchange has about 1.5 million customers.

In January 2018, Coincheck was hacked, and approximately 500 million NEM tokens ($530 million) were stolen. As a result, the digital money heist prompted The Financial Services Agency, Japan’s financial regulator, to tighten regulatory scrutiny. The agency not only ordered Coincheck to improve its security practices but also called for an improvement in the risk management infrastructure of all other crypto exchanges in the country.

In April 2018, Coincheck was acquired by Monex Group for 3.6 billion yen (US 33.4 million). The acquisition was a reaction to the NEM hack, as Coincheck recognized that it needed to strengthen its management system and organization. The move directly responded to Japan’s Financial Services Agency, which requested the exchange to make changes following the January hack — which saw Coincheck compensating the affected users.

During that, Monex Group cited hopes to hold an IPO (initial public offering) of Coincheck shares at a future date. The plan is currently being actualized through the ongoing efforts to list the exchange on the Nasdaq stock exchange through a special purpose acquisition with Thunder Bridge Capital.

Image source: Shutterstock

Source

Tagged : / / / /

Binance Invests $200M in Forbes ahead of SPAC IPO

by Blockchain News

Binance cryptocurrency exchange, the largest in terms of trading volume worldwide, is investing as much as $200 million in Forbes, through a new venture that will see the media unicorn go public in a merger with Special Purpose Acquisition Company (SPAC) Magnum Opus. 

Webp.net-resizeimage - 2022-02-11T122052.425.jpg

As announced by Forbes, the company has already inked a partnership with Magnum Opus to establish a business combination that will see Forbes go public listing on the New York Stock Exchange under the ticker symbol ‘FRBS’. The public listing deal is expected to close before the end of the first quarter, and the Binance investment will position the trading giant as a key adviser in digital assets and Web3.0 strategy.

“Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets,” said Mike Federle, CEO, Forbes. “With Binance’s investment in Forbes, we now have the experience, network, and resources of the world’s leading crypto exchange and one of the world’s most successful blockchain innovators. Forbes, already a resource for people interested in the emerging world of digital assets, can become a true leader in the field with their help.” 

The new company will pursue more innovative products and services beyond the platform’s regular publications. With a number of product offerings in the works and the terms of the deal, Patrick Hillmann, Chief Communications Officer for Binance and Bill Chin, Head of Binance Labs, the Venture Capital Arm, and Incubator of Binance, will join the Forbes Board of Directors upon the successful closing of the business combination transaction.

The blockchain and emerging Web3.0 innovation are becoming too big to ignore, and Binance’s investment in the proposed company between Forbes and Magnum Opus will help advance the scope of blockchain educating as all hands work toward pushing the industry into its next phase of the adoption cycle.

“As Web 3 and blockchain technologies move forward and the crypto market comes of age we know that media is an essential element to build widespread consumer understanding and education. We look forward to bolstering Forbes’ Digital initiatives, as they evolve into a next-level investment insights platform,” said Changpeng ‘CZ’ Zhao, Founder and CEO, Binance, shunning the earlier brawl he had with one of Forbes’ reports that claimed the trading firms strategically evade tax obligations.

Image source: Shuttstock

Source

Tagged : / / / /

Binance Invests $200M in Forbes as the Media Firm Seeks Public Listing

by Blockchain News

Binance cryptocurrency exchange, the largest in terms of trading volume worldwide, is investing as much as $200 million in Forbes, through a new venture that will see the media unicorn go public in a merger with Special Purpose Acquisition Company (SPAC) Magnum Opus. 

BIN2.jpg

As announced by Forbes, the company has already inked a partnership with Magnum Opus to establish a business combination that will see Forbes go public listing on the New York Stock Exchange under the ticker symbol ‘FRBS’. The public listing deal is expected to close before the end of the first quarter, and the Binance investment will position the trading giant as a key adviser in digital assets and Web3.0 strategy.

“Forbes is committed to demystifying the complexities and providing helpful information about blockchain technologies and all emerging digital assets,” said Mike Federle, CEO, Forbes. “With Binance’s investment in Forbes, we now have the experience, network, and resources of the world’s leading crypto exchange and one of the world’s most successful blockchain innovators. Forbes, already a resource for people interested in the emerging world of digital assets, can become a true leader in the field with their help.” 

The new company will pursue more innovative products and services beyond the platform’s regular publications. With a number of product offerings in the works and the terms of the deal, Patrick Hillmann, Chief Communications Officer for Binance and Bill Chin, Head of Binance Labs, the Venture Capital Arm, and Incubator of Binance, will join the Forbes Board of Directors upon the successful closing of the business combination transaction.

The blockchain and emerging Web3.0 innovation are becoming too big to ignore, and Binance’s investment in the proposed company between Forbes and Magnum Opus will help advance the scope of blockchain educating as all hands work toward pushing the industry into its next phase of the adoption cycle.

“As Web 3 and blockchain technologies move forward and the crypto market comes of age we know that media is an essential element to build widespread consumer understanding and education. We look forward to bolstering Forbes’ Digital initiatives, as they evolve into a next-level investment insights platform,” said Changpeng ‘CZ’ Zhao, Founder and CEO, Binance, shunning the earlier brawl he had with one of Forbes’ reports that claimed the trading firms strategically evade tax obligations.

Image source: Shuttstock

Source

Tagged : / / / /

Cathie Wood’s ARK ETF reportedly buys 6.93M shares of SPAC merging with Circle

by Cointelegraph

Cathie Wood’s Ark Invest has reportedly purchased 6.93 million shares of the special purchase acquisition company, or SPAC, that is merging with Circle, for $70.6 million through the company’s ARK Fintech Innovation exchange-traded fund (ETF). This purchase would represent a new position for the ETF, according to MarketWatch. 

Ark Invest’s ETFs have a history of bold purchases within the tech industry as indicated by their move to buy $80 million in Robinhood shares after the prices dipped back in October 2021. Wood is also bullish on crypto despite passing on buying the first Bitcoin futures ETF that same month.

Circle is the principal operator of USD Coin (USDC), which is currently the second-largest stablecoin in terms of market capitalization. Circle announced its intentions to go public in July 2021 through a SPAC with Concord Acquisition Corp in a merger that would see the company valued at $4.5 billion.

The merger was originally planned to finalize by the end of the fourth quarter of 2021, with the company being listed on the NYSE with the ticker “CRCL.” 

The move to go public came about as a response to the increasing concern posed by regulators regarding stablecoins. Regardless, the move was applauded overall by the crypto industry. Vladimir Vishnevskiy, co-founder of Swiss wealth management firm St. Gotthard Fund Management AG, noted as such and said; “[USDC] has been around since 2014, and is another example of an established player being rewarded for their input into the ecosystem.

Stablecoins are still under regulatory scrutiny in the United States as lawmakers question the market’s transparency and reserve backing. U.S. lawmakers are currently looking to introduce new legislation on crypto within the coming weeks.