Company: CRCL
Filing Date: 2025-08-04
Form Type: DRS
Source: 0000950123-25-006942
Chunk: 131

Company: Circle Internet Group, Inc.
Filing Date: 2025-08-04
Form: DRS
Chunk 131
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 and unproven. As a result, while we are able to predict the impact of interest rate changes on the reserve return rate, given uncertainties in end-user and customer behavior and interests and market
dynamics, we are unable to accurately predict the impact of such changes on reserve income.

Exogenous events and macro trends

In March 2023, SVB failed to honor Circle’s request to withdraw $3.3 billion (approximately 8% of the USDC reserves at the time) in reserve deposits,
which was submitted prior to SVB’s failure and subsequent FDIC receivership. The FDIC receivership announcement made abruptly on Friday, March 10, 2023 caused some market concern that an inability to instantly access the deposits held at
SVB might result in USDC not being fully backed by fiat-denominated reserves. In response, we publicly affirmed that in the event SVB did not make a full return of our reserve deposits, we would cover any shortfall using corporate resources,
aligning with our commitment to maintaining the trustworthiness, safety, and one-for-one redeemability of USDC by Circle Mint

79

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

customers. Subsequent secondary market trading of USDC on certain digital asset exchanges, exacerbated by the lack of primary market liquidity given the weekend closure of the banking system and
the concurrent failure of two other banks that were part of the Circle stablecoin ecosystem, which had previously provided 24/7/365 primary liquidity infrastructure, resulted in a temporary supply-demand imbalance, and consequently the secondary
market price of USDC fell below $1. On Monday, March 13, 2023, the FDIC formally announced that it would guarantee all deposits held at SVB, and USDC soon regained its $1 secondary market trading price. When the banking system reopened, we
began processing the weekend’s queued redemptions, although due to the backlog and the failure of some of the banks that were part of the Circle stablecoin ecosystem, redemptions for some customers were slowed. Although we did not incur any
direct financial loss in connection with the SVB failure and we honored one-for-one redeemability of USDC by Circle Mint customers at all times, we believe the SVB failure was a contributing factor to the subsequent decline in USDC in circulation.
Since the SVB failure, we have continued to invest in and