Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 78

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 78
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, that regularly effect transfers of digital assets on behalf of other persons. In particular, these rules require digital
asset trading platforms and custodians to report certain digital asset transactions (including sales, exchanges, and other transfers) effected on behalf of other persons on an annual return, in a manner similar to the current reporting rules for
brokers that effect stock and other securities transactions on behalf of customers. The IRS and the U.S. Department of the Treasury recently released a series of final regulations to implement certain of these rules. The final regulations’
definition of the term “broker” is broad and, in a number of respects, is unclear in scope, but generally requires certain industry participants to perform information reporting and backup withholding functions. Under the final regulations
and a notice released contemporaneously by the IRS and the U.S. Department of the Treasury in July 2024, such reporting of cost basis information and backup withholding generally will apply to custodial brokers and brokers acting as principals in
respect of transactions occurring on or after January 1, 2025, but certain transitional relief may be available for transactions occurring prior to January 1, 2026.

Under the final regulations and a notice released contemporaneously by the IRS and the U.S. Department of the Treasury in December 2024, similar obligations generally
will apply to certain providers of trading front-end service or other effectuating services in respect of transactions occurring on or after January 1, 2027, but

50

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

certain transitional relief may be available for transactions occurring prior to
January 1, 2029. The final regulations do not address all aspects of the IIJA information reporting regime and their application is uncertain in a number of respects, including with respect to the collection and reporting of cost basis information
for digital assets and the scope of transactions subject to reporting. The IRS and the U.S. Department of the Treasury indicate in these final regulations that they intend to issue separate regulations that would provide brokers with greater
flexibility to satisfy their backup withholding obligations with respect to digital asset transactions. As of December 27, 2024, lawsuits have been filed challenging the final regulations mentioned in the preceding sentences. Accordingly, it is
unclear whether and to what extent the reporting requirements enacted by such regulations will remain in force or continue to apply in the future.

In addition, the