Circle, the primary backer of the stablecoin USDC, has stated in its regulatory filings that it received an “investigative subpoena” from the SEC’s Enforcement Division in July 2021.
Circle under investigation
The subpoena came a month after Circle began advertising USDC holders with its first high-interest yield product, Circle Yield. In a subsequent announcement that boasted of Bermudian licenses, Circle promoted a “well-regulated” crypto yield product to U.S. companies.
The subpoena requested “documents and information regarding certain of our holdings, customer programs, and operations.” Circle said in the filing, which was released as part of a plan for the company to go public. “We are cooperating fully with their investigation.”
Regulatory pressure is increasing
Stablecoins seem to be the talk of the town among regulators, many of whom, like the U.S. Treasury Department, have already begun investigating the sector. According to reports, the Biden administration is also considering regulating stablecoin issuers similarly to banks, amid concerns that companies such as Tether Ltd. and Circle Internet Financial Inc. could cause financial panics and need to be more strictly regulated.
Coinbase, which made a splash in 2021 with its initial public offering, is also under fire from regulators. The San Francisco-based exchange halted its lending platform after the SEC indicated it could violate securities laws, and at the Mainnet 2021 event, a speaker was reportedly also hit with a subpoena by the SEC.