The Securities and Exchange Commission (SEC) is reportedly targeting Circle and USDC, two prominent players in the cryptocurrency space, as its next targets for enforcement action.
According to sources, the SEC will likely send a Wells Notice to Circle and USDC, which would signal the agency’s intention to take enforcement action against the companies for potential violations of securities laws.
Circle is a financial services company that operates a peer-to-peer payments technology platform and is known for its USDC stablecoin.
USDC is a stablecoin pegged to the US dollar’s value, making it an attractive investment for those seeking stability in the volatile cryptocurrency market.
A Twitter user recently tweeted about the circle and USDC being the next target of SEC after it went after BUSD.
However, the SEC has been cracking down on stablecoins recently, and Circle and USDC are not the first to come under scrutiny.
Just recently, PayPal announced that it was abandoning its stablecoin project, which many industry experts saw as a sign of the regulatory headwinds facing the cryptocurrency space.
The reason for the SEC’s focus on stablecoins is the agency’s belief that many of these assets may be classified as securities, which would subject them to a host of regulatory requirements.
The SEC has been clear in its stance that companies offering securities must comply with federal securities laws, regardless of whether they are operating in the traditional financial sector or the cryptocurrency space.