Stablecoin issuer Circle, days after proclaiming it had a very small exposure to FTX, disclosed in a Securities Exchange Commission filing that it holds about $10.6 million in equity investments related to the FTX Group.
“Circle is a tiny equity holder of FTX, and FTX is a tiny equity holder of Circle. Circle is also a tiny equity holder of Kraken, Coinbase and BinanceUS," Circle CEO Jeremy Allaire tweeted on Nov. 9.
The company behind stablecoins USD Coin (USDC) and Euro Coin (EUROC) is one of several firms that have disclosed exposure to FTX since the crypto exchange filed for bankruptcy protection on Nov. 11.
Circle disclosed the amount of its equity investments related to FTX in a Nov. 14 Securities and Exchange Commission filing regarding a planned acquisition by special purpose acquisition company Concord Acquisition Corp, which would make Circle a public company traded on the New York Stock Exchange.
A Sept. 30 monthly attestation of Circle’s assets shows that nearly 47.3 billion USD Coins were in circulation, backed by nearly $47.5 billion worth of U.S. dollars held in custody accounts.
Crypto's Lehman moment
The company also noted in the filing that it has “historically performed payment processing services for and issued and redeemed USDC for the FTX Group,” and plans to record FTX-related impairment in the fourth quarter.
“The company has suspended its services and transactions with the FTX Group and is in process of evaluating the impact on provision of future services to the FTX Group and the potential indirect financial impact of the FTX Group bankruptcy,” Circle wrote.
Allaire has referred to the FTX crisis as crypto’s Lehman Brothers moment.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.