SecProbe.io

November 1, 2024
Jeremy Allaire
Chairman and Chief Executive Officer
Circle Internet Group, Inc.
99 High Street, Suite 1701
Boston, MA 02110
Re:Circle Internet Group, Inc.
Amendment No. 2 to
Draft Registration Statement on Form S-1
Submitted August 6, 2024
CIK No. 0001876042
Dear Jeremy Allaire:
            We have reviewed your amended draft registration statement and have the following
comments.
            Please respond to this letter by providing the requested information and either
submitting an amended draft registration statement or publicly filing your registration
statement on EDGAR. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing the information you provide in response to this letter and your
amended draft registration statement or filed registration statement, we may have additional
comments. Unless we note otherwise, any references to prior comments are to comments in
our July 2, 2024 letter.
Amendment No. 2 to Draft Registration Statement on Form S-1
General
1.We note your responses to comments 3 through 7. We continue to consider your
responses and may have further comments.
2.We note your response to comment 58 of our letter dated February 27, 2024. As we
continue to evaluate your response, please supplementally provide us with your
Intellectual Property License Agreement with Coinbase.
We note your press release posted on your website announcing your plans to partner 3.

November 1, 2024
Page 2
with Coincheck, Inc. to expand USDC access in the Japanese market. Please revise to
disclose the status of this partnership and the material terms thereof, to the extent the
information is material to understanding your current and future business. Also please
tell us what consideration you have given to filing any documents memorializing the
same as an exhibit to the registration statement. Refer to Item 601(b)(10) of
Regulation S-K.
4.Your website blog post titled "Why Developers Can Trust USDC" states that there are
many DeFi lending protocols across several blockchains where end-users can earn
yield on USDC deposits, including Aave, Compound, Mango Markets, Apricot
Finance, Solend, Maple Finance, and Goldfinch Finance. Please tell us whether you
have entered into any agreements or arrangements with any DeFi lending protocols in
connection therewith. If so, and to the extent material, please revise in an appropriate
section of the prospectus to describe the material terms thereof and file the same as
exhibits to your registration statement if required by Item 601(b)(10) of Regulation
 S-K.
Prospectus summary
The issuers of Circle stablecoins, page 8
5.We note your revised disclosure under this heading that USDC is issued by two of
your wholly owned subsidiaries: (i) Circle Internet Financial, LLC, in jurisdictions
other than the European Economic Area, and (ii) Circle Internet Financial Europe
SAS in the European Economic Area. Please tell us how the issuance of USDC by
two of your subsidiaries works mechanically and whether there are any risks or other
issues you consider as a result of having two issuers of USDC.
Circle's stablecoin network in the new internet financial system, page 11
6.We note your response to prior comment 11 that in evaluating additional fee-based
products, you intend to consider those factors typically considered by businesses
seeking to launch new products, such as complexity and development costs, market
opportunity, anticipated revenues, and the competitive landscape. Please further revise
your prospectus to disclose the same.
Risk factors, page 26
7.We note that on June 6, 2023, the Commission filed an enforcement action against
Coinbase, Inc. and Coinbase Global, Inc. To the extent material, please include risk
factor disclosure describing the current and potential impacts therefrom on your
business. In this regard, please address, without limitation, whether any unfavorable
outcomes in this action could negatively impact Coinbase Global, Inc.'s ability to
perform its obligations under the Collaboration Agreement and any material impacts
and risks to your shareholders related thereto.
There is regulatory uncertainty regarding the classification of Circle stablecoins, page 30
8.Please revise your disclosure to address the fact that others, including your business
partners, may create and market investment products related to or involving USDC or
EURC that could involve the offer and sale of a security.

November 1, 2024
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Our customers' funds and digital assets may fail to be adequately safeguarded by us..., page
37
9.We note your response to prior comment 16. Please supplementally provide us with
information regarding your insurance coverage limits so that we can better understand
your analysis and conclusion. We continue to evaluate your response to prior
comment 16 and may have further comments.
We are and may continue to be subject to litigation..., page 48
10.We note your disclosure that you are currently in a dispute with Financial Technology
Partners and that, if the dispute is ultimately resolved in a manner adverse to your
position, or if you ultimately settle this dispute by mutual agreement, you may be
required to make substantial payments to Financial Technology Partners. Please revise
to include the name of the court in which the proceeding is pending and, to the extent
applicable, more specific, quantitative, disclosure regarding the relief sought. Please
refer to Item 103 of Regulation S-K.
Management's discussion and analysis of financial condition and results of operations
Key factors affecting operating results
Distribution costs, page 88
We note your response to prior comment 20 and that you believe average USDC
holdings on your and Coinbase's platforms would not be material to potential
investors and could cause confusion for potential investors because the percentage
holdings on these platforms is only one determinant of distribution costs and reserve
income significantly impacts distribution costs. Please address the following:
•We note that USDC in circulation which directly impacts respective USDC
holdings declined 45% during 2023 however USDC held on Coinbase's platform
increased from 5% at December 31, 2022 to 12% at December 31, 2023. Since
distribution payments are determined daily, tell us how a straight average captures
the impact of non-linear changes in USDC in circulation from which reserve
income is generated and allocated based on USDC holdings on the respective
platforms.
•We note that you disclose daily average USDC in circulation and resulting reserve
return rate in an apparent effort to provide more meaningful information on
reserve income and the change in reserve income rather than a straight average of
beginning and ending USDC in circulation that can be calculated from your
rollforward on page 82. Elaborate on why providing the daily average USDC on
your and Coinbase's platforms, in addition to information on period end amounts
on these platforms, is potentially confusing to investors considering that providing
information about activity over time as opposed to at a point in time is generally
well understood.
Tell us whether Coinbase provides you daily information about USDC held on its
platform. If so, tell us why you had to estimate the percentage of USDC held on
its platform and held outside your and its platforms as indicated in your response
to the second bullet of prior comment 20. Also, if so, tell us why the fact that this
information is not publicly available impacts your determination to not disclose •11.

November 1, 2024
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potentially meaningful information to investors.
Composition of USDC reserves, page 103
12.Refer to your response to prior comment 29. Please disclose in an appropriate section,
consistent with your response, the material terms of your memorandum of
understanding with BlackRock entered in April 2022 (the "MOU"), including, without
limitation, Blackrock's:
•Appointment as manager of USDC reserves and to manage USDC cash reserves,
other than up to 20% of USDC cash reserves that you may keep in bank deposits;
•Right of first refusal to be the preferred asset manager for similar arrangements
for cash reserves of other stablecoins that you may issue; and
•Right to notice of certain material capital and strategic transactions you may
undertake.

Additionally, please file the MOU as an exhibit to the registration statement pursuant
to Item 601(b)(10) of Regulation S-K.
Warrants, page 106
13.We note your response to prior comment 31. To help us further evaluate your
response, please supplementally provide us with information regarding the identities
of the commercial counterparty and the digital asset exchange that were granted
warrants, including copies of the related warrant agreements entered into April 2023
and August 2023, respectively. We may have further comments.
Business
Reserve management standard, page 129
14.You disclose that your reserve management standard limits the types of assets that
may be included in your stablecoin reserves to "(i) U.S. Treasury securities..., (ii) cash
deposits at global banks, (iii) tri-party reverse repurchase agreements fully
collateralized by U.S. Treasury securities on an overnight basis..., (iv) government
money market funds, and (v) other financial instruments including digital tokenized
products where the underlying asset composition of such financial instruments is
limited solely to eligible assets under our reserve management standard " (emphasis
added). Please revise your reference to "eligible assets under our reserve management
standard" in romanette (v) to clarify, if accurate, that you are referring to the eligible
assets identified in romanettes (i) - (iv).
15.We note your revised disclosure in response to prior comment 36. Please further
revise to disclose any guidelines or parameters utilized by your reserve management
committee to approve any changes to your reserve management strategy, limits, and
any exceptions or changes to your reserve management standard. Please also revise to
provide examples of any such changes in the past.
Collaboration with Coinbase, page 134
We note your response to prior comment 39 that you did not quantify the issuer
retention amount in your revised disclosure, as you consider such information to be 16.

November 1, 2024
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commercially sensitive information. However, this information appears to be a
material term of the Collaboration Agreement. Please further revise to disclose a
range of values from which the issuer retention amount is determined pursuant to the
terms of the Collaboration Agreement.
Note to Consolidated Financial Statements
Note 2: Summary of significant accounting policies
Assets segregated for the benefit of stablecoin holders, page F-11
17.We note your response to prior comment 41 related to your conclusion that you do not
exert significant influence over the Fund.  Please further address the following:
•Explain to us the basis for structuring the money market fund where you are the
only investor.
•Your response indicated that you have “no substantive voting rights.”  Describe to
us the decisions over which you have voting rights and why you do not believe
those voting rights are substantive.
•Explain to us how you are able to overcome the presumption that you have the
ability to exercise significant influence over the fund by virtue of your 100%
ownership.  Include in your response an analysis of the factors contained in ASC
323-10-15-6, a description of the operating and financial policies involved in
operating the fund (e.g., selecting investments, setting fees, et. al.), and how it is
not possible for you to influence those policies by virtue of your 100% ownership
and ability to redeem your shares.
•We note the Statement of Additional Information for the Fund states: “The Fund
has adopted restrictions and policies relating to the investment of the Fund’s
assets and its activities. Certain of the restrictions are fundamental policies of the
Fund and may not be changed without the approval of the holders of a majority of
the Fund’s outstanding voting securities (which for this purpose and under the
Investment Company Act means the lesser of (i) 67% of the shares represented at
a meeting at which more than 50% of the outstanding shares are represented or
(ii) more than 50% of the outstanding shares).”  Tell us how you evaluated this
approval right under ASC 323-10-15-6.
•Tell us whether your approval is necessary for the admission of other investors
into the Fund.
We acknowledge your response to prior comment 42 where you indicate that all
distribution costs under your Collaboration Agreement with Coinbase for the periods
presented were paid in corporate-held USDC and that these payments were reflected
as operating activities and a corresponding financing activity in your statements of
cash flows. We note from your April 12, 2024 response to comment 71 of our
February 27, 2024 letter that you considered the settlement of a loan payable with
corporate-held USDC to be a noncash financing activity. As corporate-held USDC is
not cash, please tell us why you do not reflect the use of it to pay accounts payables to
Coinbase under your Collaboration Agreement (and any other operating expenses) as
noncash activities in your cash flow statements. In your response, compare and
contrast your accounting for the settlement of a loan payable with corporate-held
USDC as a noncash transaction with that of your settlement of operating expense-18.

November 1, 2024
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related accounts payables. Reference for us the authoritative literature you rely upon
to support your accounting in your cash flow statements.
            Please contact Michelle Miller at 202-551-3368 or Mark Brunhofer at 202-551-3638
if you have questions regarding comments on the financial statements and related
matters. Please contact David Lin at 202-551-3552 or Sandra Hunter Berkheimer at 202-551-
3758 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Crypto Assets
cc:Richard D. Truesdell, Jr.