Webull Trims Crypto Offerings Amid Regulatory Uncertainty

Despite challenges, it aims to merge with SK Growth Opportunities Corp. and rebrand as ‘Webull Corporation,’ pending approvals.

Electronic brokerage Bloomberg News reported on February 28 that Webull decided to reduce its cryptocurrency offerings due to the adverse regulatory environment in the United States while it awaited approval to list on the Nasdaq via a particular purpose acquisition company (SPAC).

According to the organization, its prior endeavor to conduct an initial public offering (IPO) was presumably thwarted because of its cryptocurrency-related services. Webull has failed to execute its initial public offerings (IPOs).

Bloomberg reports that at the end of the third quarter of 2023, Webull sold its digital asset business and discontinued its crypto offerings due to the SEC’s ambiguous rules for registered broker-dealers that work with cryptocurrencies.

The company collaborates with Bakkt to facilitate purchasing and selling cryptocurrencies via the organization Pay App, which is categorized as an independent enterprise on its support materials.

Despite Webull’s apprehensions regarding SEC regulation, at least one retail brokerage that offered cryptocurrency services was able to complete an initial public offering.

Robinhood, the organization’s principal rival, has provided crypto trading capabilities since 2018 and concluded its initial public offering (IPO) with success in 2021.

Webull’s SPAC Strategy: Navigating Regulatory Hurdles

The organization intends to list on the Nasdaq through a particular purpose acquisition company (SPAC) agreement worth $7.3 billion with SK Growth Opportunities Corp., a blank check company.

While SPACs do offer several benefits, the primary one is that they are generally regarded as less stringent than IPOs and permit an explicit valuation.

As per the terms of the agreement, common SKGR shares will be listed under a new ticker symbol, and the merged organization shall hereafter be referred to as “Webull Corporation.”

The transaction is pending shareholder and regulatory approval before it can be finalized.

As of press time, SKGR shares were trading at $11.11, representing a 24-hour increase of 1.18%.