Company: CRCL
Filing Date: 2025-04-18
Form Type: S-1/A
Source: 0001193125-25-084832
Chunk: 51

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-18
Form: S-1/A
Chunk 51
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 USDC and EURC are not securities transactions, is premised, among other reasons, on our conclusion that neither USDC nor EURC, nor our offers and sales of USDC and EURC, meet the elements of the
Howey test or satisfies the Reves test. Among the reasons for our conclusion that neither USDC nor EURC is a security , nor our offers and sales of USDC and EURC are securities transactions, under these tests is that holders of USDC and EURC
do not have a reasonable expectation of profits from our efforts in respect of their holding of USDC and EURC. Circle stablecoin ownership does not convey the right to receive any interest, rewards, or other returns in respect of their holding of
Circle stablecoins. In addition, reserves backing

39

Circle stablecoins are composed solely of low-risk and readily liquid assets—such as short-term U.S. Treasuries and cash equivalents—and are, at all times, held in amounts that equal or
exceed the value of Circle stablecoins in circulation. In addition, such reserves are used only for redemption of Circle stablecoins and not for our (or any other entity’s) operational or general business purposes; are not otherwise lent,
pledged, or rehypothecated for any reason; and are held in a manner designed not to subject them to claims of third parties. Furthermore, we market Circle stablecoins to the public solely for use in commerce, as a means of making payments,
transmitting money, and/or storing value, and not as investments. Recent court decisions also support our analysis. For example, in June 2024, a federal district court granted in part Binance’s motion to dismiss against the SEC. The court found
that Binance’s stablecoin BUSD was not credibly alleged to be offered or sold in a securities transaction and found implausible the SEC’s allegation that Binance’s promises to develop the BUSD “ecosystem” would lead
purchasers to expect an increase in value “when the alleged defining feature of the ‘stablecoin’ was that its value would remain constant.”

On
April 4, 2025, the SEC’s Division of Corporation Finance (the “Division”) issued a statement (the “April 4 Statement”) that clarified the Division’s view that the offer and sale of Covered Stablecoins—defined as
stablecoins that are designed to maintain a stable value relative to the U.S. dollar on a one-for-one basis, can be