USDC Issuer, Circle Reacts to SEC’s Rumour Ban on Stablecoin

Sequel to a rumour making the round that the United States Securities and Exchange Commission (SEC) is set to ban USDC, the issuer company Circle has rebuffed the claim, stressing that it is wrong and unreliable. 

According to Circle’s Chief Strategy Officer, Dante Disparte, Circle was not served any “Wells Notice” as regards its United States dollar-pegged stablecoin. 

.@circle has not received a Wells notice. https://t.co/lE74zHVLka

— Dante Disparte (@ddisparte) February 14, 2023

The rumour emerged on Twitter following the latest SEC clampdown on Binance stablecoin (BUSD) issuer company Paxos on Feb. 12, which led to a halt in further minting of BUSD. 

Like BUSD, it was rumoured that USDC was also classified as a security but it has been recently declined. 

It is noteworthy that a Wells Notice entails a formal notice by the SEC intimating the recipient that the regulatory agency plans to impose enforcement actions having initially committed an offence. 

Meanwhile, the Fox News reporter, Eleanor Terrett, who initially raised the rumour said that she banked on several reliable sources before divulging the information. She thus apologized for the wrong info. 

CORRECTION: @circle has not received a Wells notice per @ddisparte and I truly do apologize for the mistake. I strive to get things right but also want to admit when I’m wrong. I’m sorry.

— Eleanor Terrett (@EleanorTerrett) February 14, 2023

Rise of Regulatory Clampdowns

More than any other time, stablecoins have been at the centre of attractions to regulatory agencies with the SEC and the New York Department of Financial Services (NYDFS) clampdown on blockchain company Paxos.

Not quite long, on Feb. 10, Kraken received a shocker as SEC indiscriminately shut down its crypto staking program over non-compliance with extant laws. Kraken thereafter reached a $30 million settlement deal with SEC. 

While the decision generated a couple of controversies over the inability of the agency to reach a consensus, SEC is unrelenting on its clampdown as it recently charged Gemini exchange and Genesis global over unregistered securities.

There is no mincing word that SEC is yet to be done with the crypto space; as such, more crypto firms should review their complaint policies and ensure that they do the needful.