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- The company revealed in regulatory filings Monday that the department is under investigation by the Securities and Exchange Commission.
- The SEC has reportedly requested documents and information relating to some of the holdings, client software and operations.
- Circle said it was “fully cooperating” with the investigation.
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Circle, the issuer of the USDC stablecoin, revealed in a regulatory filing that it received an “investigative subpoena” from the Securities and Exchange Commission in July 2021.
The department cooperates with the investigations of the Saudi Electricity Company
The company revealed on Monday that the department is under investigation by the Securities and Exchange Commission.
According to a regulatory filing on October 4, the department received an “investigative subpoena” from the SEC’s enforcement division in July 2021. The Securities and Exchange Commission requested “documents and information regarding certain [Circle’s] collectibles, customer software, and operations,” the filing said.
Circle also revealed that it was “fully cooperating” with the investigation, which began one month after the company launched its high-interest product, Circle Yield. While Circle has not disclosed any additional details related to the investigation, there are reasons to believe that the subpoena may be related to the high-yield product.
Last month, Coinbase, a member of the central consortium and the largest US-based crypto exchange, was forced to thwart the launch of a similar high-yield product, Coinbase Lend, after the SEC threatened the company with a lawsuit for issuing unregistered securities.
Based on the latest comments and regulatory actions from the SEC, it appears that it has concerns about both interest-bearing crypto products and stablecoins. Earlier this year, the agency moved against interest-bearing account providers BlockFi and Celsius, alleging that they were offering unregistered securities. Additionally, at a Senate hearing in September, SEC Chairman Gary Gensler said that “stablecoins could potentially be securities,” explaining that existing securities laws are broad enough.
The circuit file is part of the company’s plan to go public via a Special Purpose Acquisition (SPAC) vehicle through a merger with Concord Acquisition Corp, valuing the company at $4.5 billion. In early August, Circle revealed that it had applied for charter banking, a move likely to be taken in anticipation of the Biden administration’s plans to regulate all stablecoin issuers as banks.
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