Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 47

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 47
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 the Howey test. Among the reasons for our
conclusion that neither USDC nor EURC is a security is that holders of USDC and EURC do not have a reasonable expectation of profits from our efforts in respect of their holding of USDC and EURC. Circle stablecoin ownership does not convey the right
to receive any interest, rewards, or other returns in respect of their holding of Circle stablecoins. In addition, reserves backing Circle stablecoins are used only for redemption of Circle stablecoins and not to fund our (or any other
entity’s) operating expenses, product development, or any other business purpose. Furthermore, we market Circle stablecoins to the public only for consumptive purposes, as a payment stablecoin providing a stable, fast, reliable, and accessible
means of payment.

We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view. The regulatory treatment of
stablecoins such as USDC has drawn significant attention from legislative and regulatory bodies around the world, including from a variety of U.S. congressional committees and financial regulators. Moreover, there is currently no generally accepted
definition of stablecoin; the term “stablecoin” may refer to digital assets that have materially different characteristics from one another, and different types of stablecoins may be subject to different regulations and requirements.
Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding
that USDC is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders,
fines, and penalties if any Circle stablecoins were determined to be a security by a regulatory body or a court. USDC and EURC customers that purchased directly from Circle would have the right within the applicable
one-year statute of limitations to rescind their purchase and receive a full refund of the purchase price with interest thereon to the extent registration was required but not undertaken. In addition, any
enforcement action brought by the SEC against us asserting that USDC, EURC, or any other Circle stablecoin is a security—or any other action against us by any other regulator—could subject us to private litigation asserting violations of
relevant laws. Such developments could impact the adoption of Circle stablecoins, subject us to fines, penalties, and other damages, and adversely affect our business, results of operations