Cathie Wood’s ARK ETF buys $70 million in SPAC linked to stablecoin operator Circle

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Kathy Wood’s ARK Invest has bought a slug of shares in Special Purpose Acquisition Company, or SPAC, which is merging with Circle, one of the largest stablecoin companies in crypto.

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Circle plans to go public after SPAC, a provider of payments and treasury infrastructure to Internet companies, announced its plans to merge with Concorde Acquisition Corp. CND over the summer,
-0.49%

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Woods ARK Fintech Innovation ETF ARKF,
-5.23%
Purchased 6.93 million shares of SPAC for approximately $70.6 million, representing a new position for the fund.

The merger of Circle, co-founded and operated by CEO Jeremy Allaire, and Concorde was expected in the fourth quarter of 2021, with the combined entity listed on the NYSE under the ticker symbol “CRCL”.

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Circle is the principal operator of the stablecoin, the USD coin, a digital asset pegged to the dollar and intended to hold value, which acts as a “stable” asset in the world of virtual coins such as Bitcoin (BTCUSD).
-0.26%
and Ether ETHUSD,
+0.11%
On the Ethereum network which are extremely volatile.

Circle’s USD Coin USDCUSD,

The sixth largest digital asset by market cap among cryptos and the second largest stablecoin after Tether is USDTUSD.
+0.01%,
The USD accounts for about a third of the stablecoin supply.

However, stablecoins have drawn scrutiny from US financial regulators, who say the asset could pose a risk to the financial system if not properly regulated.

Last month, the Financial Stability Oversight Council, or FSOC, said in a report That “if stablecoins are marketed with a claim that they will maintain a stable price, they may be subject to widespread redemption and asset liquidation if investors doubt the credibility of that claim.”

Back in October, Circle said it received an “investigative summons” from the Securities and Exchange Commission during the summer, requesting “documents and information regarding certain of our holdings, client programs and operations.” filing, Circle said, “We are fully cooperating in their investigation.

Shares of Concorde Acquisitions, which is backed by former Barclays CEO Bob Diamond, closed down 0.5% on Thursday and has been flat for the week so far but is down 3.2% so far in 2022. By comparison, the ARK Fintech ETF ended up 5.2% on Thursday. And the first two weeks of the year were seeing a 3% weekly slide and a drop of more than 13%, so far, FactSet data shows.

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