Company: CRCL
Filing Date: 2025-05-27
Form Type: S-1/A
Source: 0001193125-25-126208
Chunk: 50

Company: Circle Internet Group, Inc.
Filing Date: 2025-05-27
Form: S-1/A
Chunk 50
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 well as under the Circle Mint user agreement (which provides for the redemption of Circle stablecoins on a one-to-one basis
for Circle Mint customers) to use our own capital to make up any shortfall. See “Business—Regulatory policy landscape.” Our reserve management standard, which, in compliance with applicable laws and regulatory guidance, limits reserve
assets to highly liquid financial instruments, is designed to materially mitigate these risks. See “Business—Reserve management standard” and “Business—Regulatory policy landscape.” However, our reserve and other
policies cannot deter, prevent, or fully protect against significant redemption demand or the ability for the Circle Reserve Fund to meet our redemption requests and banks to meet our withdrawal requests for demand deposits. Currently, all EURC
reserve assets are held only in cash.

Market participants have increasingly shown concern about the sufficiency and liquidity of reserves for dollar-denominated
stablecoins such as USDT and USDC, including due to issues in the traditional financial markets. For example, in March 2023, we announced that we had initiated transfers of the more than $3 billion of deposits from Silicon Valley Bank
(“SVB”) to other banks, but those transfers failed to settle before the Federal Deposit Insurance Corporation (the “FDIC”) placed the bank into receivership. Although all of these funds were ultimately made available and
transferred to new banks, concerns related to Circle’s access to these funds caused USDC to experience a temporary price dislocation on certain secondary trading markets during the period when banks were closed and until the resulting backlog
of redemption requests had been cleared, and the amount of USDC in circulation decreased thereafter.

In addition, given the foundational role that stablecoins play
in global digital asset markets, stablecoin growth has been tied closely to growth in digital asset markets. As a result, systemic risks that manifest themselves in the digital asset markets may lead to higher-than-normal redemption requests on
Circle stablecoins, which could lead to significant and concentrated redemption requests with respect to one or more Circle stablecoins. The collapse of TerraUSD and LUNA in May 2022 underscored the risks associated with algorithmic tokens, which
are continuing to play out as trading firms and retail and institutional lenders are facing liquidation and insolvency in the aftermath, as reflected in the Voyager Digital Ltd. and Celsius Network LLC insolvency proceedings, among others.
Additionally, the collapse and subsequent insolvency proceedings of FTX also expose the contagion risks related to the broader digital asset market.

These market