The SEC has not ‘Circled’ Around USDC Issuer With Wells Notice

The stablecoin issuer was said to be likely to face regulatory actions
Company officials denied any such possibility

The rumors and speculations are fatal in themselves but could be disastrous if placed within the nascent market space of the crypto industry. In recent days, the regulator’s scrutinies over several crypto companies have reportedly increased and are likely to extend. Amidst companies like Kraken and Paxos facing regulatory actions, USDC stablecoin issuer Circle reported receiving a notice from the US SEC.

A Fox reporter Eleanor Terett went on to Twitter and informed that the issuer of prominent stablecoin USD Coin (USDC), Circle, has received a Wells notice from the United States Securities and Exchange Commission. The order came in the wake of the company’s acquisition for selling the unregistered security, citing the sale of USDC.

However, the response from the company appeared over the social media platform, denying the news within a short time.

Chief Strategy Officer (CSO) and global policy head of Circle Pay, Dante Disparte, responded to the claim and noted, “Circle has not received a Wells notice.”

The denial from the company official was crucial and trusted information to get, and following this, Terett deleted her tweet. Another tweet followed with the apology that she trusted her “trusted sources” on this.

Should the ‘mis’-information stay longer, it would have turned fatal for the stablecoin issuer. Dante responded to her apology and cited the same, stating that the market is having “swirl and rumors.”

Later on, Terret posted a “correction” tweet mentioning that according to Dante, “Circle has not received a Wells notice” while apologizing for her mistake.

Crypto Space is Already Facing Scrutiny

Crypto space is currently facing significant scrutiny already, with several notable instances of actions against prominent crypto exchange Kraken and fintech firm Paxos Trust Company. The former was charged for failing to register the company’s offering and selling a “crypto-asset staking-as-a-service program.” While the latter is recently confirmed to receive a Wells notice following a similar acquisition of failing to register the offering.

Wells notice is when a financial or security regulator notifies the prospective respondent of the charges that were brought against it.

Last week, Coinbase CEO Brian Armstrong showcased his concerns over the rumor that the SEC would ban crypto staking services for retail investors. In his Twitter post, he put several arguments in support of how staking, like crypto innovations, is crucial for the industry and the US economy.

The rumor somewhat turned into reality when the financial watchdog barred Kraken from the offerings of crypto– staking services. Additionally, the crypto firm was charged to pay a hefty fine of about 30 million USD for selling unregistered securities.

Armstrong came forward following the instance and clarified the company’s stance if it would face a similar condition. He indicated opting for legal procedures and bringing the issue to the US court.