Circle Denies Receiving Wells Notice as Rumors of SEC Crusade Engulf Twitter

On Tuesday afternoon, Dante Disparte, the chief strategy officer of Circle, denied the rumors that his company received a Wells notice from the SEC. The account that initially shared the news was briefly deleted before getting restored and publishing a correction.

Circle Denies Receiving Wells Notice from SEC

On Tuesday afternoon, Eleanor Terrett, a Fox Business reporter, published a tweet claiming that certain sources revealed that the SEC has sent a number of Wells notices to multiple stablecoin issuers including Circle. While the post swiftly spread on the social media platform, some were quick to point out that news might just be stemming from the FUD surrounding stablecoins due to recent aggressive regulatory actions. 

Circle’s chief strategy officer, Dante Disparte, was quick to react denying that his company received a Wells notice from the Commission. A Wells notice represents a notification sent from the SEC to a company that the agency planning to launch an enforcement action.

Shortly after Disparte denied the rumor, Terrett published a correction and offered an apology to the community. Interestingly, the reporter’s account was unlisted for about an hour after making the original post.

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Regulators Increase Pressure on Digital Assets

While a report recently published by the White House called on Congress to step up its efforts with regard to regulating cryptocurrencies, the SEC increased its pressure on the industry. Last week, the Commission revealed it had launched an enforcement action against the cryptocurrency exchange Kraken claiming that its staking service constitutes an unregistered securities offering.

At the same time, it was announced that the exchange agreed to pay $30 million and terminated its staking service in the US in a settlement with the agency. Just days later, it was revealed that along with staking, stablecoins might be in regulatory crosshairs. 

Earlier this week, the stablecoin issuer revealed it had been ordered to stop minting its Binance-branded BUSD tokens by the New York State Department of Financial Services (NYDFS). A later report alleged that the regulatory action was initiated after Circle filed a complaint with the New York watchdog claiming that Binance was not properly backing its tokens. 

The pressure was further increased when it was revealed that the SEC was also targeting Paxos over its BUSD offering. On Monday afternoon, the stablecoin issuer published its official statement on the matter signaling its willingness to “vigorously litigate” against the regulatory action if necessary. 

Editorial note (February 14th, 6:02 PM EST): The article was updated to include Terrett’s correction.

Do you think the SEC is preparing to target other major stablecoin issuers this year? Let us know in the comments below.