Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 304

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 304
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 assetson the Consolidated Balance Sheets. The gain and loss related to return of digital assets held as collateral and impairment loss on digital assets are included in Digital assets (gains) losses and impairmentin the Consolidated Statements of Operations. F-14

CONFIDENTIAL TREATMENT REQUESTED BY CIRCLE INTERNET GROUP, INC. PURSUANT TO 17 C.F.R. § 200.83

The obligation to return the collateral was accounted for as a hybrid instrument, with a
liability host contract that contains an embedded derivative based on the changes in the fair value of the underlying digital asset. The host contract and its embedded derivative was reported in Obligations to return digital asset collateral
on the Consolidated Balance Sheets. The embedded derivative was accounted for at fair value, with changes in fair value recognized in Digital assets (gains) losses and impairment in the Consolidated Statements of Operations.

The term of these borrowings could be fixed or open term, however, the Company only issued fixed term loans of USDC during the life of the product. The Company received
loan fee income from the Borrower at a predetermined rate which varied based on whether the loan was open or fixed term. The loan fee income is included inOther revenuein the Consolidated Statements of Operations. Loan fees paid in USDC
were based on the predetermined rate for a particular term and the amount of USDC loaned. These borrowings bear a fee payable by the Company to the customer’s account and were paid in kind based on a percentage of the amount borrowed and were
denominated in USDC. The borrowing fee is recognized using the effective interest method and is included in Other costsin the Consolidated Statements of Operations.

Beginning in the second half of 2022, the Company wound down and completely liquidated the Circle Yield program in November 2022.

Digital assets related to borrowing and lending services

The Company
enters into Circle stablecoin borrowing and lending arrangements. Loan fee income earned from lending activities and borrowing fees incurred from borrowing activities are calculated using the effective interest method and are included in Other revenue and Other costs, respectively, in the Consolidated Statements of Operations. In connection with the Circle stablecoin borrowed from lenders and the Circle stablecoin lent to its borrowers, the Company recognized Stablecoins receivable and Stablecoins borrowed,respectively, on the Consolidated Balance Sheets. Stablecoins receivable are recorded at amortized cost, net of any allowance for credit losses, if applicable. An impairment is recognized if it
is