Crypto Miner Prime Blockchain’s $1.25B SPAC Deal Expires

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 acquisitions company (SPAC), mutually agreed to terminate the merger agreement, according to an 8-K filing published Monday.

It’s not clear why both companies decided to end the deal, but 10X said it plans to combine with another target.

SPACs are essentially publicly traded companies that have no real business. “Sponsors” created them to raise money to buy an existing privately held company, thereby taking it public.

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

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

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

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

The number of SPAC IPOs has dropped 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 scrapped so far this year.

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

Even traditional merger agreements have been affected. Crypto investment firm Galaxy Digital pulled out of an acquisition deal with BitGo this week. In response, BitGo is preparing to sue Galaxy, claiming they are owed a $100 million termination fee.

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