Company: CRCL
Filing Date: 2025-06-02
Form Type: S-1/A
Source: 0001193125-25-132755
Chunk: 54

Company: Circle Internet Group, Inc.
Filing Date: 2025-06-02
Form: S-1/A
Chunk 54
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The introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector
issued stablecoins, or significantly limit their utility. National governments around the world could introduce CBDCs, which could in turn limit the size of the market opportunity for USDC, EURC, and other potential future Circle stablecoins.

Although we have concluded that Circle stablecoins are not “securities” under U.S. federal securities laws and our offers and sales of Circle stablecoins are not securities transactions, any classification of Circle stablecoins as a “security,” or our offer or sale of Circle stablecoins in securities transactions, would subject us to additional regulation and could materially impact the operation of our business.

We believe that Circle stablecoins are not securities and that the transactions in which we offer and sell them are not
securities transactions under U.S. law.

We have continually evaluated Circle stablecoins against the various definitions of “security” under U.S. federal
securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases. Our position that neither USDC nor EURC is a
“security,” and that our offers and sales of USDC and EURC are not securities transactions, is premised, among

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other reasons, on our conclusion that neither USDC nor EURC, nor our offers and sales of USDC and EURC, meet the elements of the Howey test or satisfies the Reves test. Among the reasons
for our conclusion that neither USDC nor EURC is a security , nor our offers and sales of USDC and EURC are securities transactions, under these tests 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 composed solely of low-risk and readily liquid assets—such as short-term U.S. Treasuries and cash equivalents—and are, at all times, held in amounts that equal or exceed the value of Circle stablecoins in circulation. In
addition, such reserves are used only for redemption of Circle stablecoins and not for our (or any other entity’s) operational or general business purposes; are not otherwise lent, pledged, or rehypothecated for