Recent crypto events have necessarily affected the many players in this market. Circle, the company that issues the USDC Coin (USDC), for example, has indicated that the fall of FTX has greatly impacted its calculations of financial projections. Circle CEO Jeremy Allaire also reports a drop in circulation of around 3 billion USDC. Binance is said to be behind this huge drop. It specifically refers to automatic conversions to BUSD.
The S-4 statement
Under applicable regulations, a company must file an S-4 filing prior to a merger. The same applies before a takeover or an exchange offer proposal. This document is to be submitted to the SEC.
Circle is now on its second S-4 filing. The first is in August 2021, when Circle planned to merge with Concord Acquisition.
Circle filed its second S-4 statement with the SEC on November 14. In this documentthe company recounts its erroneous 2022 projection due to Binance’s automatic conversion.
Binance’s responsibility for this drop in circulation is difficult to assess
It all started when Binance announced the automatic conversion of USDC into its own stablecoin BUSD. Despite the allegations made about Binance, the company Circle makes one essential point: for the time being, it is not able to assess the extent of Binance’s liability.
Circle, however, estimates that of the $8.3 billion drop in USDC in circulation, Binance’s automatic conversion would be the cause of the $3 billion. This estimate is for circulation from June 30, 2022 to September 30, 2022.
Circle plans to merge with capital markets firm Concord Acquisition. But this erroneous projection risks harming his plans. Are FTX and Binance the only culprits to blame? Or this bad projection of Circle would be due to something else? To be continued…
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