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Crypto company Circle, one of the backers of stablecoin USDC, is under investigation by the U.S. Securities and Exchange Commission.

Circle received an “investigative subpoena” in July from the SEC requesting “documents and information regarding certain of our holdings, customer programs, and operations”, the company said in a Monday filing, as part of its required disclosure. “We are cooperating fully with their investigation,” the company said. 

Circle plans to go public later this year via a merger with a special purpose acquisition company, or SPAC, Concord Acquisition Corp CND, -0.59%.

It is unclear what is the focus of SEC’s ongoing investigation. A representative at Circle told MarketWatch that the company cannot comment on an open investigation, while the July subpoena was first disclosed in Circle’s August filing. 

In September, Nasdaq-listed crypto exchange Coinbase COIN, +2.55% said the SEC was investigating the company. The regulator said Coinbase’s planned Lend program, which would have let customers earn interest of around 4% annual percentage yield by lending their holdings of USDC to Coinbase, should be registered as securities.

Coinbase later dropped its plan to launch the program.

USDC, a digital currency pegged 1:1 to U.S. dollars, is developed by the CENTRE Consortium, which was jointly founded by Coinbase and Circle.

In June, Circle launched a crypto yield product targeting institutions, which is regulated by the Bermuda Monetary Authority.

“Our view is that if you’re going to offer a product where people are essentially making an investment, and getting essentially like a fixed income type product, that is a security,” Jeremy Allaire, co-founder and CEO of Circle, said in alternative asset conference SALT in September. 

Source: This post first appeared on http://marketwatch.com/

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