Company: CRCL
Filing Date: 2025-05-16
Form Type: S-1/A
Source: 0001193125-25-121234
Chunk: 239

Company: Circle Internet Group, Inc.
Filing Date: 2025-05-16
Form: S-1/A
Chunk 239
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 We hold
property subject to unclaimed property laws, and we have an ongoing program designed to help us comply with these laws. However, there is significant regulatory uncertainty with how states and foreign jurisdictions treat digital assets under
unclaimed property rules.

165

Taxation

Changes in tax
and tax reporting could affect our business. For example, the IRS has recently issued rulemaking that requires digital asset issuers—including stablecoin issuers—and entities that deal in and use these instruments to engage in certain
transaction-level reporting. As of December 27, 2024, lawsuits have been filed challenging this rulemaking. Accordingly, it is unclear whether and to what extent these requirements will remain in force. These requirements may be onerous to
administer and decrease the attractiveness of incorporating stablecoins into purchase and sale transactions.

Indirect regulatory requirements

We maintain relationships with certain partners—including banks and other financial institutions in the United States and abroad—that are regulated by state,
local, and federal agencies. Because of these relationships, we may be subject to examination or regulatory obligations imposed on us by these institutions’ regulators (such as audit, privacy, and business continuity obligations). As knowledge
of these obligations may be constructively imposed on us, we seek to account for them in our commercial agreements. For example, bank regulators generally require that they have the ability to exercise audit rights with respect to their regulated
entities’ service providers; as such, our commercial contracts with banks typically accommodate this requirement. In addition, our commercial agreements generally include privacy and business continuity obligations, as applicable.

Treatment of reserve assets

Throughout this prospectus, we note that Circle
stablecoins are redeemable on a one-for-one basis for the respective underlying fiat currencies. We base this statement on the current state of our company and operations. See “—Our platform, products, and ecosystem—Circle Liquidity
Services—Circle Mint” and “Glossary—The issuers of Circle stablecoins” for more information.

We place great importance on safeguarding
Circle stablecoin reserves and keeping them bankruptcy remote from our general creditors. As a consequence, we believe that Circle stablecoins are structured in a manner that entitles the holder to absolute beneficial ownership of the underlying
reserve assets, given that we hold only bare legal title to the underlying assets but have no beneficial interest or property rights in such assets. Therefore, the reserve assets backing USDC and EURC, beyond the bare legal title that we hold,
should not be considered property of our bankruptcy estate in the event