Circle reveals cooperation in ongoing SEC investigation

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Circle, the company behind the world’s second-largest stablecoin USD Coin, has been subpoenaed by the U.S. Securities and Exchange Commission (SEC).

According to an Oct. 4 regulatory filing from Circle, the SEC issued an “investigative subpoena” from its Enforcement Division in July.

Circle, which is behind the USDC stablecoin, stated that it would be fully cooperating with the regulator after receiving the request:

“In addition, in July 2021, we 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.”

The Circle filing is part of its plan to go public via a special-purpose acquisition vehicle through a merger with Concord Acquisition Corp, with the firm valued at $4.5 billion.

CIrcle issued an identical statement in an August filing amid the SEC’s investigations into its operation of former subsidiary Poloniex. That same month, Circle agreed to pay the SEC more than $10 million in fines for charges against Poloniex for operating as an unregistered cryptocurrency exchange.

Related: Coinbase removes ‘backed by US dollars’ claim for USDC stablecoin

In late July, Circle released a disclosure report revealing that 61% of USDC’s reserves were held in cash and cash equivalents, the remainder in commercial paper accounts, treasuries, and bonds.

In early September, the SEC threatened to sue USDC-issuing Centre Consortium member Coinbase over a proposed lending product that would yield interest rates for select holders of USDC.