Company: CRCL
Filing Date: 2025-04-01
Form Type: S-1
Source: 0001193125-25-070481
Chunk: 218

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-01
Form: S-1
Chunk 218
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 regulations governing our MTLs, except in limited circumstances, such as when prohibited by law or court order or instances where fraud is suspected, we are required to
honor outstanding stored value and payment instrument obligations (i.e., Circle stablecoins) of customers (i.e., we are required to honor redemptions by Circle Mint customers) even if reserve assets and the proceeds from reserve assets are
insufficient to do so. In such situations, we must use our corporate funds and resources to satisfy any shortfall.

In addition, Circle Internet Financial, LLC was
the first company approved for a BitLicense by the NYDFS, which is required for any person that engages in virtual currency business activity in New York or with New York customers. The BitLicense enables Circle Internet Financial, LLC to engage in
virtual currency exchanging and trading services, electronic money transmitting with virtual currencies, issuing prepaid access/stored value with virtual currencies, and selling prepaid access/stored value with virtual currencies. Circle Internet
Financial, LLC also holds a Virtual Currency License from the Louisiana Office of Financial Institutions, which, like the BitLicense issued by the NYDFS, is required for any person that engages in virtual currency business activity in Louisiana or
with Louisiana customers. These licenses impose additional requirements on how we maintain the Circle stablecoin reserves. For example, regulations governing the BitLicense and related NYDFS guidance requires, among other things, that (i)
stablecoins must be fully backed by reserve assets, (ii) reserves must be available for timely redemptions, (iii) reserves must be segregated from the proprietary assets of the issuer and held in custody for the benefit of holders of Circle
stablecoins with U.S. state or federally chartered depository institutions with deposits insured by the FDIC and/or asset custodians approved in advance by the NYDFS, (iv) reserves must be limited to specified assets such as U.S. Treasury bills
with maturities of three months or less, reverse repurchase agreements fully collateralized by U.S. Treasury obligations, government money market funds, and deposit accounts at U.S. state or federally chartered depository institutions, and (v)
reserves must be attested to monthly and annually by a certified public accountant. In addition, regulations governing the BitLicense as well as regulations governing our Virtual Currency License prohibit us from lending, pledging, rehypothecating,
or otherwise encumbering reserve assets. Other jurisdictions are expected to require similar licenses. For example, California’s Digital Financial Assets law will