Stable coin issuer Circle reports it’s cooperating with SEC

Stable coin issuer Circle reports it’s cooperating with SEC

By Sam Grant - min read

Circle’s statement follows an ‘investigative subpoena’ from the US Securities and Exchange Commission

USDC issuer Circle has revealed it is working together with the US Securities and Exchange Commission amid an ongoing investigation. The regulator slapped the company with a subpoena as per a filing published on its website. The stablecoin issuer got the notice back in July but only responded to it publicly this month.

The current investigation is different from an earlier one that saw the issuer’s former subsidiary Poloniex get fined $10 million. This was after it was found guilty of operating unregistered digital securities.

The company has only confirmed it is under the SEC’s scrutiny but hasn’t provided specifics on the requested documents or the progress of the investigation so far. Circle sent out a message saying it will offer full cooperation to the regulatory agency on the current matter. The peer-to-peer payments technology firm is expected to submit documents to the agency.

“In addition, in July 2021, we [Circle] received an investigative subpoena from the SEC Enforcement Division requesting documents and information regarding certain of our holdings, customer programs, and operations. We are cooperating fully with their investigation.”

It appears the regulator is tightening its grip on crypto lending products and stablecoins. Just last month, the agency sent a Wells Notice order to Coinbase for its high-yield crypto product and many believe it is the reason why the exchange was forced to shelve the product for life.

Not to forget, Circle disclosed in July that it intended to become publicly listed later this year. The company’s chief executive Jeremy Allaire said in an interview with CNBC at the time that the firm had seen the perfect opportunity to go public and it would seize it as going public would help it become trusted. It will go through with the plans via merger with special purpose acquisition company Concord.

USD coin is currently the second-largest stable coin with a market capital of $32.3 billion and behind Tether with a $68 billion market cap according to data from CoinMarketCap. Both are changing hands at around the $1 range.