The Securities and Exchange Commission (SEC) has been conducting a years-long investigation into the revenue-sharing arrangement between cryptocurrency exchange Coinbase and Circle regarding their USDC stablecoin operations, according to newly revealed correspondence dating back to 2023.
Key Details of the SEC Investigation
The probe, which began during Gary Gensler’s tenure as SEC Chair, focuses on how Coinbase and Circle divide the revenue generated from USDC, one of the largest stablecoins by market capitalization. This investigation highlights the increasing regulatory scrutiny of stablecoin operations and revenue models in the crypto industry.
Impact on Stablecoin Market
This investigation comes at a crucial time for the stablecoin market, as JPMorgan’s recent expansion of their Kinexys network with GBP support directly challenges the stablecoin market. The SEC’s focus on USDC’s revenue model could have far-reaching implications for how stablecoin issuers structure their business arrangements.
Regulatory Implications
The investigation represents another example of increased regulatory oversight in the crypto sector, particularly concerning stablecoin operations and revenue models. This scrutiny could lead to new precedents for how stablecoin partnerships are structured and regulated.
FAQ Section
What is the focus of the SEC investigation?
The investigation centers on how Coinbase and Circle split revenue generated from USDC operations.
When did the investigation begin?
The probe began in 2023 during Gary Gensler’s leadership of the SEC.
How might this affect the stablecoin market?
This investigation could lead to changes in how stablecoin partnerships are structured and potentially influence future regulatory frameworks.