Breaking: Circle squashes rumors of planned SEC enforcement action

Rumors swirled on Twitter that the stablecoin issuer received a litigation notice from the U.S. securities regulator, but a Circle executive rebuffed the claim.

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 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. Replying on Twitter just 15 minutes after Terrett’s tweet, Disparte said his firm has not received a Wells Notice. 

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

— Dante Disparte (@ddisparte) February 14, 2023

A Wells Notice is a formal notice sent by the SEC informing the recipient that the agency plans 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. 

Here is the response from @circle. I went with the word of several trusted sources on this. I apologize for the mistake @ddisparte. https://t.co/NjyD57PDuZ

— Eleanor Terrett (@EleanorTerrett) February 14, 2023

Dante accepted her apology, 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.

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

Fears of regulatory action against stablecoin issuers have been running high this week after Paxos Trust Company, the issuer of Binance USD (BUSD), confirmed that it had received a Wells Notice alleging 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.