Crypto Miner Prime Blockchain’s $1.25B SPAC Deal Fizzles Out

Crypto mining and infrastructure startup Prime Blockchain is no longer going public through a $1.25 billion SPAC deal.

Prime and 10X Capital Venture Acquisition Corp II, a special purpose acquisition company (SPAC), mutually agreed to end the merger agreement, according to an 8-K filing published Monday.

It isn’t clear why both companies decided to end the agreement, but 10X said it plans to combine with another target. 

SPACs are essentially publicly-traded firms that have no real operations. “Sponsors” set them up to raise money for acquiring an existing privately-held company, thereby taking it public. 

They tend to reveal names of target companies only when they’re ready to file extensive paperwork with the US Securities and Exchange Commission.

San Francisco-headquartered Prime Blockchain promotes its services as diversified infrastructure for the Web3 and crypto economy. The firm, whose CEO is ex-Goldman Sachs investment banking veteran Gaurav Budharani, provides tech solutions for bitcoin mining, custody and DeFi. 

Prime’s SPAC merger, announced in April, would have listed the combined crypto company on the NASDAQ. The companies had secured a $300 million equity financing facility from Cantor Fitzgerald affiliate CF Principal Investments. 

The cancellation is indicative of cooling across SPAC markets, as high inflation and rising interest rates sap energy from a sector booming as recently as last year. 

The SPAC IPO count has dwindled to just 64 so far this year, down from 613 last year and 248 in 2020, data from SPACInsider shows. More than 40 SPAC mergers have reportedly been scratched so far this year.

Last month, social trading firm eToro’s planned public listing via a SPAC was called off due to “impracticable” circumstances. 

Even traditional merger deals have been affected. Crypto investment firm Galaxy Digital pulled out of an acquisition agreement with BitGo this week. In response, BitGo is preparing to sue Galaxy and claims it is owed a $100 million termination fee.

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