Only four months since its first announcement to go public at $4.5 billion valuations via a special purpose acquisition(SPAC) merger, stablecoin USDC issuer, Circle has revealed that the company has been summoned by the U.S. Securities and Exchange Commission (SEC) with an investigative subpoena.
An investigative subpoena is usually issued before the filing of any criminal charge and allows prosecutors to gather information before deciding whether to charge an entity with a crime.
The person or agency served an investigative subpoena is often expected to accept an interview and answer the prosecutor’s questions, provide documentary materials, or both.
On its part, Circle says it is all set to tender unreserved cooperation with the SEC’s regulatory requirements, stating:
“In July, 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 with their investigations.”
The latest development is closely related to the company’s efforts to go public via the SPAC merger with Concord Acquisition Corp.
USDC Not Stopping
In July last year, a Coinfomania report revealed that Circle’s stablecoin USDC has maintained its place as the second-largest stablecoin in the market, with over $1 billion market capitalization.
At the time of writing, the world’s second-largest stablecoin has surpassed a whopping market cap of $32 billion.
Earlier in June, Circle made a move to increase transparency and trust among USDC users by adjusting the composition of assets that back the stablecoin.
The company noted that USDC coins are now 100% backed by cash reserves and US Treasury bonds.
Since its entry into the cryptocurrency market, stablecoins have been welcomed by market participants who are weary of the volatile nature of cryptocurrencies, especially bitcoin.
More so, agitations about what could be a safer alternative to the shortcomings of USDT (Tether) since the token is not fully backed by the U.S. dollar and the claims that it would not submit to government auditing gave birth to USDC, as Circle boasts of requesting a government license
And now the stablecoin issuer is poised to meet with the SEC, hoping to receive a response in its favor.