“According to relevant media reports on April 5, Citibank immediately suspended its special-purpose acquisition companies (SPAC) business after the Securities and Exchange Commission (SEC) proposed new regulations.
The document shows that SPAC is a unique financial instrument in the U.S. financial market, also known as a shell company. Such kind of companies can help start-ups obtain huge amounts of financing and go public in a short time, so they are of great benefits to companies that really want to start a business.
However, the risks of SPAC companies are also huge: they are easily manipulated by money laundering groups. For example, Digital World Acquisition Corp (DWAC) is one shell company of CCP agent Wu Zheng, which had earlier defrauded many Trump’s supporters by merging with former U.S. President Trump’s “Truth Social” media platform to go public.
It is reported that the SPAC business of Citi Bank in 2021 underwrote US $22 billion, taking nearly 14% of the market, ranking the Number 1 in the world. Subsequently, the transaction between Citigroup and an American electric vehicle manufacturer triggered an investigation by SEC, which led to the decline of Citigroup’s SPAC business at the end of last year.
Some analysts believe that Citi Bank’s announcement to suspend SPAC business may cause other banks to follow suit.”