Binance has bought $100 million of stock in Circle Internet Group, the company behind the USDC stablecoin, according to a filing Circle made with the US Securities and Exchange Commission (SEC) on Tuesday.
Circle issued 1,237,011 Class A shares to the exchange at $80.84 each under an agreement signed on September 17. That price sits about 14% below where the stock closed on Monday.
What Binance Received and What It Agreed to Give Up
The shares were sold privately rather than on the open market, which is why they were exempt from SEC registration. Binance cannot sell them for two years, and it cannot hedge the position with offsetting trades during that window.
The lockup can end sooner if Binance walks away from the commercial side of the deal under conditions set out in the filing. Either company can terminate if specified events occur. Binance keeps full voting rights on the shares throughout.
Alongside the equity, the two firms signed a five-year commercial agreement. Binance will promote USDC through Circle’s Modular Smart Contract Wallet, software that lets an app or exchange hold and move digital dollars on a user’s behalf without that user managing private keys.
Circle will pay Binance a monthly incentive fee calculated as a percentage of the USDC sitting in that wallet infrastructure. The filing does not disclose the percentage.
Circle Stock Went Into the Deal Bruised
The timing is tight. Two days before the agreement was signed, the CLARITY Act stalled in the Senate and Circle shares fell 11% in a session, as BeInCrypto reported at the time. The bill would set out which US regulator oversees which digital assets.
The stock has since recovered. It closed at $94.49 on Monday, up 2.95% on the day, and traded at $95.76 in Tuesday pre-market.
Over the past quarter it is up 18.53%, with a relative strength reading of 56.2, a momentum gauge that sits in neutral territory between 30 and 70.
Circle carries a market value near $25.8 billion and trades at about 19 times earnings. It reported $701.3 million of revenue in the latest quarter and $2.75 billion over the past year.
The Cost Side of Distribution
Paying an exchange to push USDC is not new for Circle. The company already shares stablecoin economics with Coinbase, an arrangement that shaped its push into wrapped Bitcoin earlier this year. Distribution costs are the main drag on what stablecoin reserves earn.
USDC is the sixth largest crypto asset with a market value of $74.6 billion, and the token trades at $0.9998.
Investors who kept buying through this year’s slide, including Cathie Wood’s ARK funds, now have a second data point on how outside parties price the company. Binance paid $80.84. The market says $95.50.
The next quarterly report should show whether the new fee widens Circle’s distribution bill or the extra USDC balances cover it.
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