SEC Serves Circle With Subpoenas Amid Ongoing Investigation

A regulatory filing dated October 4 has revealed that the investigative subpoena towards Circle was issued in July of 2021. 

Per the regulatory filing, USDC stablecoin issuer Circle is reportedly under investigation from the SEC and it has been served with an investigative subpoena to hand over documents and information on particular operations, client programs, and holdings. 

Circle argued that it is in full cooperation with the SEC investigation, this coming after one month of the high-interest yield product launch, Circle Yield. Even though more information on the investigation is yet to be disclosed, it is not farfetched to assume that the most recent investigation can be in relation to the product launch. 

As previously reported by Crypto Academy, a similar inquiry and legal action threat from the Securities and Exchange Commission (SEC) for releasing securities that were unregistered led Coinbase, a member of the Centre Consortium and among the biggest crypto exchanges in the world to postpone the release of Coinbase Lend, a similar product

The SEC seems to be worried about both crypto-related interest-bearing instruments and stablecoins, based on recent remarks and regulatory undertakings. The commission took action against interest-bearing account providers BlockFi and Celsius in 2021, contending that unregistered securities were being sold. Furthermore, SEC Chair Gary Gensler stated in a Senate hearing during last month that stablecoins may very well be securities and the specificity of current security laws is lacking. 

This filing of Circle is a vital part of the plans to issue an IPO where the company could be valued well over $4.5 billion through SPAC, the Special Purpose Acquisition Vehicle combined with Concord Acquisition Corporation (CAC). In August, Circle revealed that it is aiming for a banking charter application which was most definitely prompted by the regulations of President Biden to make banks out of stablecoin issuers. 

Also read: Despite Ongoing Price Volatility, BTC Reaches 50k

 

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