Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 219

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 219
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EA 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 the court found implausible the SEC’s allegation that Binance’s promises to develop the BUSD “ecosystem” would lead purchasers to expect an increase in value “when the alleged defining feature of the ‘stablecoin’ was that its value would remain constant.” The court further noted that “it may be more difficult to make the Howeyshowing when stablecoins are involved.” We acknowledge that while the SEC has not objected to our position that Circle stablecoins are not securities, and our position is consistent with the court’s findings with respect to BUSD, the SEC and other federal courts may in the future find that payment stablecoins in general and USDC and EURC in particular are “securities” notwithstanding our conclusion and the contrary legal positions of other federal regulators, such as the CFTC. See “Risk factors—Risks related to our business and industry—Absent federal regulations, there is a possibility that Circle stablecoins may be classified as “securities.” Any classification of Circle stablecoins as a “security” would subject us to additional regulation and could materially impact the operation of our business.” Evolving regulatory landscape in the United States We are hopeful that a comprehensive U.S. federal-level regulatory framework for stablecoins will emerge in the near term. For example, the proposed Clarity for Payment Stablecoins Act of 2023 would establish a comprehensive regulatory framework