Company: CRCL
Filing Date: 2025-05-16
Form Type: S-1/A
Source: 0001193125-25-121234
Chunk: 86

Company: Circle Internet Group, Inc.
Filing Date: 2025-05-16
Form: S-1/A
Chunk 86
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 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 These December 2024 regulations were subsequently repealed under the Congressional Review Act on April 10, 2025, after President Trump signed into law a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 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 with a fair market value of more than $10,000. These rules and the information reporting rules discussed above, the effects of
which may depend in significant part on further regulatory or other guidance from the IRS as well as legal challenges and judicial decisions, could create significant compliance burdens and uncertainties for us and our customers, and could affect
the price of digital assets, which could