Concord Acquisition Corp. (NYSE:CND) announced this morning that it has mutually agreed to terminate its combination with cryptocurrency payments platform Circle.

Concord now has just a few days remaining on its clock to complete a business combination with a deadline of December 10, 2022. The SPAC can still seek a shareholder vote to extend that date to January 31, 2023, but the SEC has not yet declared its S-4 registration statement effective. While the SEC has been increasing its oversight of SPAC deals, it has been particularly challenging for firms involved in the crypto industry as they face more scrutiny.

The SPAC inked its deal with Circle on July 8, 2021, at an initial equity value of $4.5 billion, but the parties re-struck the transaction in February with an increased proposed equity value of $9 billion.

Although we have seen many SPAC deals revised, most of the revisions have been downward as SPACs received some pushback on terms from investors ahead of close. To roughly double a target’s value was certainly a bold move at the time considering the current market environment. However, since that time, conditions have in the crypto market have been extremely challenging with a number of players in the space filing for bankruptcy and of course, the allegations of fraud at FTX.

Nonetheless, Circle then received $400 million in funding in April with investments from BlackRock, Inc (NYSE:BLK), Fidelity Management and Research, Marshall Wace LLP, and Fin Capital. The investment was not directly associated with the business combination, but Fidelity and Marshall Wace participated in the transaction’s original PIPE before it was canceled and replaced with the current terms.

While the termination of the crypto deal comes shortly after the implosion of the FTX exchange, Circle CEO Jeremy Allaire believed that the collapse could serve as an opportunity to spark a conversation between policymakers and regulators to increase much-needed regulations on the crypto industry. Circle recently disclosed that it held a $10.6 million equity position in FTX, causing Circle’s performance to be “materially lower” than the projections it previously made in February.

“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” said CEO Jeremy Allaire in today’s press release.

Today’s announcement also disclosed that Circle had just become profitable in the third quarter of 2022, with total revenue and reserve interest income of $274 million and net income of $43 million. Circle also ended the quarter with close to $400 million in unrestricted cash.

Boston-based Circle is a peer-to-peer cryptocurrency service managing the USD coin and SeedInvest crowdinvesting platform.

UPDATE: Concord subsequently released a second press release stating that it intends to redeem all of its outstanding shares of Class A common stock, effective as of the close of business on December 20, 2022, due to its inability to complete a business combination. The per-share redemption price for the public shares is expected to be approximately $10.17.