Arca Divests Circle Shares After $10M IPO Disappointment

Arca, a digital investment company, has divested all of its shares in Circle following a contentious initial public offering (IPO) process. The decision was prompted by a scathing open letter published by Arca's Chief Investment Officer, Jeff Dorman, on social media. In the letter, Dorman criticized Circle for allocating a mere $135,000 worth of shares to Arca, despite the firm's order for $10 million in Circle shares submitted in April 2025. Arca had been a long-time supporter and one of the earliest investors to place a bid, making the allocation particularly disappointing.

Dorman expressed frustration over the lack of transparency from Circle, stating that Arca had been informed of their order two months prior and had received gratitude for their support. He highlighted the significant waste of resources for Arca, as their analysts and operations teams had invested time and effort into a deal that ultimately did not materialize as expected. As a result of this dissatisfaction, Arca has decided to close all of its accounts with Circle and will no longer accept USDC, the world's second-largest stablecoin issued by Circle.

Circle's public listing on the New York Stock Exchange (NYSE) is a significant development in the crypto industry. As the issuer of USDC, Circle now has access to the world's deepest capital market, which could potentially enhance its liquidity and stability. However, the controversy surrounding Arca's share allocation raises questions about the fairness and transparency of Circle's IPO process. The incident underscores the growing tensions between digital investment firms and stablecoin issuers, highlighting the importance of transparency and fair allocation practices in the crypto industry.

Dorman's letter, which has since been deleted, emphasized the need for better communication and transparency in the IPO process. He criticized Circle for not being forthcoming about their intentions, which resulted in Arca's resources being wasted. This incident serves as a reminder that even established companies in the crypto industry must prioritize transparency and fairness in their dealings with investors to maintain trust and credibility. The move by Arca to divest its shares in Circle and cease accepting USDC is a significant development that could have broader implications for the crypto industry, as it highlights the potential consequences of unfair allocation practices and lack of transparency.