Company: CRCL
Filing Date: 2025-04-01
Form Type: S-1
Source: 0001193125-25-070481
Chunk: 51

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-01
Form: S-1
Chunk 51
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 demand.

The launch of central bank digital currencies (“CBDCs”) may adversely impact our business.

The introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector
issued stablecoins, or significantly limit their utility. National governments around the world could introduce CBDCs, which could in turn limit the size of the market opportunity for USDC, EURC, and other potential future Circle stablecoins.

Absent federal regulations, there is a possibility that Circle stablecoins may be classified as “securities.” Any classification of Circle stablecoins as a “security” would subject us to additional regulation and could materially impact the operation of our business.

We believe that Circle
stablecoins are not securities and that the transactions in which we sell them are not securities transactions under U.S. law. Neither the SEC nor any other U.S. federal or state regulator has challenged our assessment, but they have also not
publicly stated whether they agree with our assessment. Despite the Trump Administration’s Executive Order titled “Strengthening American Leadership in Digital Financial Technology” which includes as an objective, “promoting the
growth of ‘lawful and legitimate’ U.S. dollar-backed stablecoins,” Circle stablecoins have not yet been classified with respect to U.S. federal securities laws. Therefore, while (for the reasons discussed below) we have concluded that
USDC is not a “security” within the meaning of the U.S. federal securities laws, and registration (or an exemption from registration) of offers or sales of Circle stablecoins is therefore not required under the applicable securities laws,
we acknowledge that a regulatory body or federal court may determine otherwise. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on such a finding that USDC is a “security.”

Specifically, under U.S. federal securities laws, we believe, and the SEC has not objected, that Circle stablecoins are not “securities” when offered and
sold as currently conducted by us because of the features of Circle

39

stablecoins. We have also adapted our process for analyzing the U.S. federal securities law status of Circle stablecoins over time, as guidance and case law have evolved. As part of our U.S.
federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these
definitions, such as the U.S. Supreme Court’s