Circle Denied: Company Did Not Receive Wells Notice From US SEC

Key Points:

• Circle CSO has denied that the company received a Wells notice from the US SEC. This is just fake news.
• The “Wells Notice” is an informal reminder issued by the US SEC to US-listed companies prior to civil action.
• The market became chaotic after the order to stop issuing BUSD with Paxos was executed.

US Fox Business reporter Eleanor Terrett tweeted early this morning that the US Securities and Exchange Commission (SEC) has issued a Wells notice to US stablecoin companies, including Circle, asking them to stop selling unregistered securities.

Reportedly, the “Wells Notice” is an unofficial reminder issued by the US SEC to US-listed companies before civil litigation. Listed companies that have received notice can contact and negotiate with the SEC before receiving a formal lawsuit.

Earlier on February 13, stablecoin issuer Paxos faced a lawsuit from the US SEC because BUSD received a notice from Wells.

Faced with this news, Dante Disparte, Circle’s chief strategy officer and head of global policy, quickly refuted the statement on Twitter. Terrett also deleted the tweet shortly after, saying he had taken information from several trusted sources and apologizing to Disparte.

The overall market is currently susceptible because stablecoin BUSD has been ordered to stop minting. BUSD was previously a very strong stablecoin in trading pairs on Binance. Despite the current situation of Paxos, Binance has announced that it will continue to support BUSD in the near term to reassure its users.

As mentioned in the previous Coincu News article, Paxos Cryptocurrency Company burned over $700 million in BUSD tokens after just 27 hours of implementing the ban.

Regarding the investigation of stablecoin issuer Paxos, it is reported that its rival Circle itself reported the violations of rival Paxos to New York authorities.

At the end of 2022, Circle filed a complaint with the New York Department of Financial Services (NYDFS), which regulates both stablecoin issuers within New York state limits, claiming that it had obtained a license proof on the blockchain that Binance does not maintain sufficient collateral for the issued amount of BUSD.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

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