Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 306

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 306
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 ultimately allowing the Circle stablecoins to be redeemed. Deposits from stablecoin holders do not include
amounts associated with corporate-held stablecoins. Cash associated with such corporate-held stablecoins are presented as Cash and cash equivalents segregated for corporate-held stablecoins on the Consolidated Balance Sheets. When the Company makes
payments for goods and services in the form of corporate-held stablecoins, the Company records an associated Deposit from stablecoin holders and records the cash associated with such stablecoins as Cash and cash equivalents segregated for stablecoin
holders.

As of December 31, 2023 and 2022, the Company’s eligible liquid assets, solely consist of cash and cash equivalents and short-term U.S.
government obligations, were greater than the aggregate amount of custodial funds due to customers.

Derivative contracts, including embedded derivatives

Derivative contracts derive their value from underlying asset prices, other inputs or a combination of these factors. ASC 815-10-15-83 identifies the characteristics required for a feature to be considered a derivative. Pursuant to ASC 815-10-15-83, the Company has entered into certain contracts with digital asset settlement features and others with interest rate adjustment features that have a
notional based on a fixed number of units or the principal balance of the debt, an underlying based on the price of the digital asset or the interest rate, and are net settleable as the underlying digital asset is readily convertible to cash or are
contractually net settleable. In the case of contracts that represent derivatives in their entirety, there is no or minimal initial net investment, and in the case of embedded features in a hybrid instrument, the contract has no or minimal initial
net investment as the cost of the embedded feature is entirely attributable to the hybrid debt-like host contract. For features embedded in a hybrid contract, the economic characteristics and risks of the embedded features are not clearly related to
those of the associated host contract and are therefore required to be recorded at fair value, with the difference between the basis of the hybrid financial instrument and the fair value of the embedded derivatives recorded as the carrying amount of
the host contract.

In connection with the obligation to return digital asset collateral related to lending activities, an embedded derivative for the digital asset
settlement feature is recognized relating to the differences between the fair value of the underlying digital asset, which is recognized on the date the collateral is received, and the fair value of the amount that will ultimately be returned, based
on changes in the spot price of the underlying digital asset over the