Company: CRCL
Filing Date: 2025-04-01
Form Type: S-1
Source: 0001193125-25-070481
Chunk: 219

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-01
Form: S-1
Chunk 219
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 require persons engaging in digital asset business activities to obtain a license
from the California Department of Financial Protection and Innovation when the law comes into effect on July 1, 2025.

While our MTLs and money services
business registration status subject us to regulations that govern material aspects of our business—for example, how we commercialize Circle stablecoins, onboard customers, and maintain adequate reserves to fully back Circle
stablecoins—such regulation is not equivalent to the type of prudential regulation and supervision that applies to regulated banks, such as under the Federal Deposit Insurance Act, National Bank Act, Bank Holding Company Act, and the Federal
Reserve Act, which include prudential supervision by regulators, minimum capital requirements, and specified prohibited activities.

Commodities and securities laws

The CFTC has stated in guidance and before Congress, and federal case law relating to CFTC enforcement actions have supported, that at least some digital
assets, including Bitcoin, Ether, and certain stablecoins, fall within the definition of a “commodity” under the Commodity Exchange Act (the “CEA”) and the regulations of

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the CFTC thereunder. In particular, on October 12, 2023, the CFTC expressly stated in a complaint against a third party that USDC is a “commodity” as defined in the CEA and indicated that futures, options, and swap contracts relating to USDC are squarely within the CFTC’s jurisdiction. The CFTC has regulatory and supervisory authority with respect to so-called“commodity interest” transactions—namely, futures, options, swaps, other derivative products, and certain retail leveraged commodity transactions—involving digital assets that are non-securitycommodities, including the markets on which these products trade. In addition, the CFTC retains enforcement authority to police against fraud and manipulation in spot (i.e., cash) non-securitycommodity markets, including spot markets for digital asset commodities such as USDC. Given our novel business model and uncertainty regarding application of some of the laws and regulations to which we may be subject, we may become subject to regulatory scrutiny or legal challenge with respect to our compliance with these requirements. Circle’s long-standing view is that payment stablecoins—such as USDC and EURC—are not “securities” as defined in the U.S. federal securities laws, including the Securities Act and the Exchange Act. Our view is supported by a recent federal court finding in Binance v. the SECwhere