Company: CRCL
Filing Date: 2025-04-18
Form Type: S-1/A
Source: 0001193125-25-084832
Chunk: 226

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-18
Form: S-1/A
Chunk 226
---
—including
stablecoin issuers—and entities that deal in and use these instruments to engage in certain transaction-level reporting. As of December 27, 2024, lawsuits have been filed challenging this rulemaking. Accordingly, it is unclear whether and to
what extent these requirements will remain in force. These requirements may be onerous to administer and decrease the attractiveness of incorporating stablecoins into purchase and sale transactions.

Indirect regulatory requirements

We maintain relationships with certain
partners—including banks and other financial institutions in the United States and abroad—that are regulated by state, local, and federal agencies. Because of these relationships, we may be subject to examination or regulatory obligations
imposed on us by these institutions’ regulators (such as audit, privacy, and business continuity obligations). As knowledge of these obligations may be constructively imposed on us, we seek to account for them in our commercial agreements. For
example, bank regulators generally require that they have the ability to exercise audit rights with respect to their regulated entities’ service providers; as such, our commercial contracts with banks typically accommodate this requirement. In
addition, our commercial agreements generally include privacy and business continuity obligations, as applicable.

Treatment of reserve assets

Throughout this prospectus, we note that Circle stablecoins are redeemable on a one-for-one basis for the respective underlying fiat currencies. We base this statement
on the current state of our company and operations. See “—Our platform, products, and ecosystem—Circle Liquidity Services—Circle Mint” and “Glossary—The issuers of Circle stablecoins” for more information.

We place great importance on safeguarding Circle stablecoin reserves and keeping them bankruptcy remote from our general creditors. As a consequence, we believe
that Circle stablecoins are structured in a manner that entitles the holder to absolute beneficial ownership of the underlying reserve assets, given that we hold only bare legal title to the underlying assets but have no beneficial interest or
property rights in such assets. Therefore, the reserve assets backing USDC and EURC, beyond the bare legal title that we hold, should not be considered property of our bankruptcy estate in the event of a bankruptcy or insolvency. Due to the novelty
of stablecoins, however, courts have not yet considered the treatment of underlying reserve assets in the context of a bankruptcy or insolvency of a stablecoin issuer and have only issued a limited number of rulings related to digital assets in the
context of a bankruptcy or insolvency. Should a court conclude—consistent with our position—that the underlying reserve