Circle squashes rumors of planned SEC enforcement action

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USD Coin (USDC) issuer Circle has denied rumors that it received a “Wells Notice” over its United States dollar-pegged stablecoin.

On Feb. 14, a now-deleted tweet from Fox Business reporter Eleanor Terrett claimed Circle had been ordered by the U.S. Securities and Exchange Commission (SEC) to cease the sale of USDC — due to the stablecoin being an unregistered security. 

However, the rumor was swiftly rebuffed by Dante Disparte, Chief Strategy Officer and Head of Global Policy at Circle Pay on Twitter just 15 minutes after Terrett’s tweet, noting his firm has not received a Wells Notice. 

A Wells Notice is a formal notice sent by the SEC informing a recipient that it’s planning to bring enforcement actions against them. 

In response to Circle’s denial, Terrett said she “went with the word of several trusted sources” and apologized for the mistake. 

Dante responded to Terrett that her apology is accepted, adding:

“Alas, there is a lot of churn, swirl and rumors informing the market right now.”

The original tweet from Terrett has since been deleted. Her account on Twitter was temporarily deleted but has since returned.

Fears of regulatory action against stablecoin issuers have been running high this week after Paxos Trust Company, the issuer of Binance USD (BUSD), confirmed it had received a Wells Notice that alleged it failed to register the offering under federal securities laws. 

Related: Stablecoins not the target in BUSD crackdown: Matrixport head of research

Asked earlier this week whether Circle had received a similar notice from the SEC concerning USDC, Disparte told Cointelegraph: 

“Circle maintains that USDC is a regulated dollar digital currency issued as stored value under U.S. money transmission law.”

“Facts and circumstances in any type of regulatory action like this are all different, as are the structural and regulatory considerations with each of the cryptocurrencies that are in circulation around the world,” he added.