Company: CRCL
Filing Date: 2025-06-02
Form Type: S-1/A
Source: 0001193125-25-132755
Chunk: 86

Company: Circle Internet Group, Inc.
Filing Date: 2025-06-02
Form: S-1/A
Chunk 86
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, the U.S. federal income
and foreign tax treatment of transactions involving digital assets are uncertain, and it is unclear what guidance may be issued in the future on the treatment of digital asset transactions for U.S. federal income and foreign tax purposes. See
“—Future developments regarding the treatment of Circle stablecoins and other stablecoins for U.S. federal income, state, and foreign tax purposes could adversely impact our business.”

On November 15, 2021, former President Biden signed into law the Infrastructure Investment and Jobs Act (the “IIJA”). The IIJA implements a set of
comprehensive tax information reporting rules that apply to persons, including digital asset trading platforms and custodians, 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 subsequently 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.

In December 2024, the IRS and the U.S. Department of the Treasury contemporaneously released additional final regulations and a notice which imposed similar reporting
obligations to certain providers of trading front-end service or other effectuating services. These December 2024 regulations were subsequently repealed under the Congressional Review Act on April 10, 2025, after President Trump signed into law a
congressional joint resolution of disapproval providing that the December 2024 regulations shall have no force or effect.

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