Arca Chief Investment Officer Jeff Dorman said the digital investment company has sold all of its Circle shares following the stablecoin company’s recent listing on the New York Stock Exchange.
The update followed a scathing open letter published by Dorman on social media on June 5, criticizing Circle for giving the investment firm a “throwaway” allocation in Circle’s initial public offering (IPO).
According to Dorman, Arca submitted an order for $10 million in Circle shares in April 2025 and only received a $135,000 allocation despite being a long-time supporter and one of the earliest investors to submit a bid. The executive wrote in a now-deleted letter:
“We pinged you separately two months ago indicating our order, and you thanked us for the support. If you were going to f[***] us at the end, the least you could have done was tell us two months ago so we didn’t waste our analysts’ and ops teams’ time on a deal that you had no intention of allocating shares to us.”
“Arca is closing all of our accounts with Circle and will tell every single dealer we work with that we will no longer accept USDC,” Dorman continued.
Cointelegraph reached out to Circle for comment on the letter but hadn’t received a response by the time of publication.
Circle’s public listing is a significant development in the crypto industry as the issuer of the world’s second-largest stablecoin, Circle-USD (USDC), with a total market capitalization of over $61 billion, now has access to the world’s deepest capital market.
Circle lists on the NYSE to trading frenzy
Circle began trading on the NYSE on June 5 under the ticker CRCL, following an IPO that raised $1.05 billion.
The company’s shares surged by 167% on its debut, closing out the trading day at $82.
The stock continued the rally on June 6 and is currently trading hands around $115 per share during intraday hours.
Quick Summary of the News:
- Arca, a digital asset investment firm, sold all its Circle (CRCL) shares after the IPO.
- Arca’s CIO, Jeff Dorman, publicly criticized Circle for a small IPO allocation despite a $10 million order.
- Dorman stated Arca is closing all accounts with Circle and will no longer accept USDC.
- Circle’s IPO raised $1.05 billion and its stock initially surged, reaching around $115 during intraday trading.
- Circle is the issuer of USDC, the world’s second-largest stablecoin.
Why It Matters:
Arca’s decision to divest from Circle and publicly denounce its IPO allocation raises a few key concerns. Firstly, it signals potential dissatisfaction amongst institutional investors regarding the handling of the IPO. While the stock price initially surged, this type of public dispute can erode confidence. Secondly, Arca’s refusal to accept USDC is a symbolic, but potentially impactful, blow to the stablecoin’s reputation. While Arca’s influence might be limited, the move highlights concerns about fairness and accessibility within the crypto investment space. The IPO allocation process for high-demand companies is always scrutinized, but this situation brings those concerns to the forefront in the crypto world.
Market Impact:
While the initial market reaction to Circle’s IPO was positive, Arca’s move could have a ripple effect. It’s unlikely to cause a major collapse of USDC, given its large market capitalization and widespread adoption. However, it may contribute to increased scrutiny of Circle’s governance and its relationships with institutional investors.
Here’s a simplified view of the possible impacts:
| Factor | Potential Impact |
|---|---|
| USDC Market Cap | Possible minor decrease due to confidence concerns |
| CRCL Stock Price | Potential for volatility and price correction |
| Investor Sentiment | Increased caution towards Circle and its IPO process |
Expert Take or Personal Insight:
While Circle’s successful IPO is undoubtedly a milestone for the crypto industry, the Arca situation serves as a crucial reminder that optics and relationships matter. The handling of IPO allocations can significantly impact investor sentiment, and transparency is paramount. It’s possible that Circle underestimated the potential backlash from allocating a smaller amount to an early supporter like Arca. This also underscores the inherent tensions that can arise as crypto companies mature and navigate the traditional financial world.
Actionable Insight:
Traders and investors should closely monitor USDC’s market capitalization and trading volume in the coming weeks. Any significant decrease could indicate broader concerns about the stablecoin’s stability. Additionally, keep an eye on CRCL’s stock price; further volatility or a sustained downward trend could suggest that the market is taking Arca’s concerns seriously. Consider diversifying stablecoin holdings as a risk mitigation strategy.
Conclusion:
Arca’s public fallout with Circle highlights the complexities of navigating the intersection between crypto and traditional finance. While Circle’s IPO remains a positive development for the industry, this incident serves as a cautionary tale about the importance of transparency and investor relations. The long-term impact on USDC and CRCL will depend on how Circle addresses these concerns and rebuilds trust with key stakeholders.