Company: CRCL
Filing Date: 2025-04-01
Form Type: S-1
Source: 0001193125-25-070481
Chunk: 52

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-01
Form: S-1
Chunk 52
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 decisions in the Howey and Reves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing
guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that neither USDC nor EURC is a “security” is premised, among other reasons,
on our conclusion that neither USDC nor EURC meets the elements of the Howey test. Among the reasons for our conclusion that neither USDC nor EURC is a security 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
Circle stablecoins are used only for redemption of Circle stablecoins and not to fund our (or any other entity’s) operating expenses, product development, or any other business purpose. Furthermore, we market Circle stablecoins to the public
only for consumptive purposes, as a payment stablecoin providing a stable, fast, reliable, and accessible means of payment.

We acknowledge, however, that the SEC, a
federal court or another relevant entity could take a different view. The regulatory treatment of stablecoins such as USDC has drawn significant attention from legislative and regulatory bodies around the world, including from a variety of U.S.
congressional committees and financial regulators. Moreover, there is currently no generally accepted definition of stablecoin; the term “stablecoin” may refer to digital assets that have materially different characteristics from one
another, and different types of stablecoins may be subject to different regulations and requirements. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if
reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that USDC is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if any Circle stablecoins were determined to be a security by a regulatory body or a court. USDC and EURC customers that
purchased directly from Circle would have the right within the applicable one-year statute of limitations to rescind their purchase and receive a full