Company: CRCL
Filing Date: 2025-05-16
Form Type: S-1/A
Source: 0001193125-25-121234
Chunk: 222

Company: Circle Internet Group, Inc.
Filing Date: 2025-05-16
Form: S-1/A
Chunk 222
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coin using the Licensed Marks, we make payments to Coinbase for its role in the distribution of USDC and growth in the USDC ecosystem. These payments are determined based on the daily income generated from the reserves backing such stablecoin,
less the management fees charged by non-affiliated third parties for managing such reserves (such as asset management and custody fees) and certain other expenses, which is referred to as the “payment base.” From this payment base,
(i) we retain a portion ranging from an annualized low-double-digit basis point to high tenth of a basis point based on the amount of USDC in circulation on such day, in consideration of our role as stablecoin issuer and which is designed to
partially reimburse us for indirect costs of issuing stablecoins and the management of the associated reserves, such as maintaining our accounting, treasury, regulatory, and compliance functions (the “issuer retention”), (ii) we and
Coinbase each receive an amount equal to the payment base multiplied by the percentage of such stablecoin that is held in the applicable party’s custodial products or managed wallet services at the end of such day (the “party product
economics”), and (iii) after deducting amounts payable to other approved participants in the USDC ecosystem, Coinbase receives 50% of the remaining payment base (the “ecosystem economics”). In our consolidated financial
statements, the payments made to Coinbase under the Collaboration Agreement are recorded as distribution costs with respect to the applicable stablecoin. In addition, the Collaboration Agreement permits either party (and in Coinbase’s case,
subject to our right of first refusal) to launch new stablecoins using the Licensed Marks that do not already correspond to an existing stablecoin. Any new stablecoins would be subject to the same economic arrangements as USDC.

If we (i) determine in good faith that payments to Coinbase for a given stablecoin under the Collaboration Agreement would violate an applicable law or order issued
by a government agency or court, or (ii) an order from a court of competent jurisdiction prohibits us from continuing to satisfy our payment obligations to Coinbase under the Collaboration Agreement with respect to a given stablecoin, in either
case, the parties will first try to amend the Collaboration Agreement or restructure their operations within a certain period of time (the “restructuring period”) to avoid such violation. If the amendment or restructuring proves
ineffective or we do not resume payment to Coinbase with respect to such stablecoin under the Collaboration Agreement following the restructuring period, upon Coinbase’s written request, the Licensed Marks