Company: CRCL
Filing Date: 2025-02-13
Form Type: DRS/A
Source: 0000950123-25-001965
Chunk: 48

Company: Circle Internet Group, Inc.
Filing Date: 2025-02-13
Form: DRS/A
Chunk 48
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, financial condition, and prospects.

Recent court cases support our analysis that Circle stablecoins are not securities. 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.” In July 2024, the SEC ended its investigation
into the Paxos Trust Company as the issuer of the BUSD stablecoin, stating that it will not recommend enforcement action against Paxos in the

32

CONFIDENTIAL TREATMENT REQUESTED BY CIRCLE INTERNET GROUP, INC. PURSUANT TO 17 C.F.R. § 200.83

investigation of BUSD, which market participants have interpreted as a conclusion
that such stablecoin is not a security.

Notwithstanding these positive indications, if one or more Circle stablecoins were classified as “securities,” we
and other market participants engaging with Circle stablecoins would be subject to significant additional regulation, much of which is incompatible with our and their current practices. Among other things, this would require us to register the offer
and sale of Circle stablecoins under the Securities Act (absent an available exemption) and could obligate us to register as a broker-dealer or in other categories with respect to our role in facilitating transactions in Circle stablecoins.
Third-party market intermediaries could be required to register in a number of capacities. See “—If Circle stablecoins were classified as “securities” under U.S. securities laws, only registered broker-dealers would be able to
intermediate sales of Circle stablecoins between us and purchasers, which they may be unable to do consistent with their regulatory requirements.”

Moreover, although we believe that Circle stablecoins are not “securities” under U.S. federal securities laws when offered and sold as currently conducted by
us, third parties, including our business partners, may create and market investment products related to or involving Circle stablecoins that could involve the offer and sale of a “security” under U.S. federal securities laws. In such
cases, the failure of third parties to properly register such offer and sale (or avail themselves of an exemption from such requirements) would