The Securities and Exchange Commission Again Subpoenas Circle Financial

The Securities and Exchange Commission Again Subpoenas Circle Financial
Image featuring Jeremy Allaire, CEO of Circle; Source: Google images
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Circle, a financial services company that uses blockchain for P2P payments, is under investigation by United States SEC. It received an investigative subpoena from the Securities and Exchange Commission in July. The information was disclosed by the Circle in its filing that was made to go public.

The subpoena requested the company for specific information and documents related to their holdings, operations and customer programs. It was sent to Circle for a $4.5 billion deal with Special Purpose Acquisition Company.

Notably, Circle started as a P2P crypto payment platform in 2013 and sponsored the crypto exchange Poloniex. The exchange was later spun out in 2019. Since 2020, Circle's primary focus has been stablecoins. It launched USDC in 2018, backed by 1 U.S. dollar.

What was the SPAC deal?

The crypto company, the Circle, had earlier decided to merge with the Special Purpose Acquisition Company. Merging with SPAC is a popular way to be a public company because SPAC is a publically traded blank check company.

The deal with SPAC valued $4.5 billion to Circle Financial.

USDC is one of the most stable cryptos

The stablecoins have the ability to reduce the volatility of the crypto market, and it makes them incredibly beneficial for the industry. The U.S. dollar backs many cryptocurrencies, and the USD Coin is the most stable among them. Every USDC is backed by a Dollar in ratio 1:1, and thus, it can manage to have price stability. No doubt that USDC is one of the fastest-growing cryptos because of its speed, transparency and liquidity.

We know that BTC and ETH are popular cryptocurrencies, but they often are criticized for their high volatility. Due to this reason, these cryptos cannot be used as a medium of exchange. But the virtual currencies such as USD Coin can easily be used for trading and payments because of their price stability.

These stablecoins are highly impacting the crypto marker because they empower the DeFi projects. Not only this, but stablecoins can potentially speed up the adoption of cryptos by the general public. 

Closing Thoughts

According to the statement, Circle financial declined to elaborate on the matter, but they are entirely cooperating with SEC. Circle Financial isn’t new to these SEC’s dealings. Earlier it was filled case on its discontinued Poloniex business. In 2017, SEC filed a complaint against Poloniex regarding the trading of cryptos characterized as securities. It offered $10.4 million to settle the case.