Company: CRCL
Filing Date: 2025-04-01
Form Type: S-1
Source: 0001193125-25-070481
Chunk: 220

Company: Circle Internet Group, Inc.
Filing Date: 2025-04-01
Form: S-1
Chunk 220
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 the court 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.” The court further noted that “it may be more difficult to make the Howeyshowing when stablecoins are involved.” We acknowledge that while neither the SEC nor any other U.S. federal or state regulator has challenged our position that Circle stablecoins are not securities, and our position is consistent with the court’s findings with respect to BUSD, no U.S. regulator has stated publicly whether it agrees with our assessment. 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.” See “Risk factors—Risks related to our business and industry—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.” Evolving statutory and regulatory landscape in the United States We are hopeful that a comprehensive U.S. federal-level regulatory framework for stablecoins will emerge in the near term. For example, the U.S. Senate Committee on Banking, Housing, and Urban Affairs recently held a mark-up of the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act of 2025), which would establish a comprehensive regulatory framework for payment stablecoins. Its key provisions include:

| • |     | defining requirements and privileges for entities legally permitted to issue payment stablecoins, restricting issuance into 
 the United States to federally or state-approved issuers;                                                                   |

| • |     | establishing a regulatory framework allowing both banks and approved nonbank entities to issue payment stablecoins under 
 specific licensing requirements;                                                                                         |

| • |     | providing a dual regulatory pathway for issuers to be licensed at the state or federal level, with issuers exceeding $10 
 billion in outstanding issuance required to transition to federal oversight;                                             |

| • |     | implementing strict reserve, disclosure, and redemption requirements, mandating 1:1 backing with high-quality liquid assets 
 and requiring monthly public reporting of reserves;                                                                         |

| • |     | requiring prudential regulation and supervision for federal qualified nonbank payment stablecoin issuers, under the 
 oversight of the Office of the Com