According to the company’s regulatory filings, Circle has been under investigation by the SEC since July 2021. Circle Pay is behind the renowned stablecoin USDC. The U.S. Security and Exchange Commission (SEC) has had an eye on stablecoins for a while.
In July this year, the company reported that it received an Investigative subpoena from the SEC. In addition, the SEC Enforcement Division requested important documents from Circle. Detailed information included holdings, operations and customer programs.
Circle cooperation with SEC
In a tweet today through CoinDesk, Circle Pay reported on its cooperation with the SEC. According to a filing on October 4th, findings indicated a long-term investigation from July. USDC is the second-largest stablecoin in the world.
The subpoena arrived soon after Circle launched Circle Yield. One thing has nothing to do with the other. However, the SEC in recent times has been focused on stopping such products from getting into the market.
Following the public subpoena, Circle reinstated its full cooperation with the U.S. government entity. Also, the Circle filing is part of an effective public plan for a merger with Concord Acquisition Corp. The firm value is at $4.5 billion with a ready plan to acquire a special-purpose vehicle.
Despite the legal proceedings in August, Circle filed a similar Filing. Due to the breach, Circle paid more than $10 million in fines to SEC in the same month. The charges included operating an unregistered crypto exchange for Poloniex.
Amidst a legal battle, in late July released a disclosure report. The report revealed Circle Pay USDC reserved 61% in cash and the remaining in treasuries and bonds. Early September, SEC threatened to sue Coinbase over unauthorized trade with Circle.
U.S. Regulators Focus on Stablecoins
Under the leadership of Gary Gensler, SEC has targeted multiple crypto industries. After he was nominated to lead SEC, crypto enthusiasts speculated his support for the industry. Their speculations came off as authentic by the fact that he taught a blockchain course at MIT. Also, he wrote an op-ed on how Bitcoin could be a “catalyst for change”.
However, in his first years of tenure, he has focused on more regulations for the crypto industry. Following grave remarks, he termed crypto a “speculative asset class”. Gensler has repeatedly made a case for formulating and implementing consumer protection laws.
Additionally, he has spearheaded the regulation of stablecoins such as USDC. In his statement earlier this summer, he insisted stablecoins facilitates users looking to sidestep public policies. His main concern is eliminating traditional financial systems, facilitating money laundering, and evading taxes/sanctions.
Moreover, other policy lawmakers take on his point of view in the Janet Yellen met with other Federal agencies heads earlier this year. Their main discussion was to develop a regulatory framework for stablecoins with urgency.
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