Company: CRCL
Filing Date: 2025-08-04
Form Type: DRS
Source: 0000950123-25-006942
Chunk: 78

Company: Circle Internet Group, Inc.
Filing Date: 2025-08-04
Form: DRS
Chunk 78
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 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. Notice 2025-33
released on June 12, 2025, further extends the transition relief for transactions effected during calendar year 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2024 regulations were subsequently repealed under the Congressional Review Act on April 10, 2025, after President Trump signed into law a congressional joint resolution of disapproval providing that the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 and reporting of cost basis information for digital assets and the scope of transactions subject to reporting. Moreover, it is possible that future revisions to the regulations will substantially
alter the rules contained in the current regulations. Accordingly, there remains substantial uncertainty regarding the manner and extent to which the information reporting rules contemplated by the IIJA will be implemented.

In addition, the IIJA extends the reporting requirements for businesses that receive more than $10,000 in cash in a transaction (or related transactions) to
transactions involving the receipt of digital assets