Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 327

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 327
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ward adjustments                      |     |   |       — |   |
| Downward adjustments                    |     |   |  (1,510 | ) |
| Impairments (1)                         |     |   | (11,242 | ) |
| Balance as of December 31, 2022 (2)     |     | $ |  42,516 |   |

| (1) |     | Include $10.6 million of impairment loss on equity investments in FTX Trading Ltd. and West Realm Shires Inc. |

| (2) |     | Excludes $7.9 million of strategic investments not accounted for under the measurement alternative as of December 31, 2022. |

9. Derivatives and embedded derivatives The Company accounts for its obligation to return digital assets held as collateral as a debt host payable with an embedded derivative at fair value and recognizes the liability within Obligations to return digital asset collateral on the Consolidated Balance Sheets. The arrangement is a hybrid instrument, consisting of a debt host contract initially measured at fair value with an embedded forward feature based on the changes in the fair value of the underlying digital asset. Within the obligation to return digital asset collateral is a feature indexed to the underlying digital asset that is not clearly and closely related to a debt instrument and therefore meets the definition of a derivative, which requires bifurcation. Such feature is bifurcated and marked to market through Digital assets (gains) losses and impairment on the Consolidated Statements of Operations. In its normal course of business, the Company enters into lending agreements with counterparties to lend stablecoins and obtains digital asset collateral at predetermined rates where the Company collects a loan fee or receives services and recognizes gain or loss on the change in fair value of the digital assets held as collateral. The Company enters into certain strategic investments in the form of forward contracts to purchase a specified quantity of digital assets. Certain of these contracts are accounted for as derivatives or investments with embedded derivatives, and accounts for these derivatives and embedded derivatives within Investments on the Consolidated Balance Sheets. The derivatives and bifurcated embedded derivatives are marked to market through Other income (expense), net on the Consolidated Statements of Operations. The fair value of the Company’s derivatives and embedded derivatives are as follows (in thousands):

|                                                                      |     |   | December 31, 2023 |     |   | December 31, 2022 |
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