Circle, the issuer behind the second-largest stablecoin USDC, is facing public criticism from one of its early backers. Jeff Dorman, Chief Investment Officer at Arca, published a scathing open letter criticizing Circle’s recent IPO allocation practices—and announced that Arca would sever all ties with the company.
🚨 “A Joke Allocation,” Says Arca CIO
In a letter shared on social media, Dorman revealed that Arca received only a $135,000 allocation in Circle’s IPO, despite submitting a $10 million order and being among the first to commit. Dorman condemned the decision as “inappropriate” and “a joke, throwaway allocation.”
“I cannot believe our efforts to help you grow for years culminated in you giving us a joke, throwaway allocation… You are the first and only crypto company that has ever treated Arca this way.”
He continued with a harsh rebuke of Circle’s leadership:
“Most of Arca’s management team left Wall Street eight years ago to start a crypto-native company specifically to get away from TradFi clowns like you. Ironically, you’ve come full Circle.”
❌ Arca Cuts All Ties With Circle
As a result of the perceived snub, Dorman announced:
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🔻 All Arca accounts with Circle will be closed
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🚫 Arca will actively discourage other firms from working with Circle
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🔥 He implied Circle has abandoned the crypto-native ethos in favor of traditional finance behavior
📈 Circle’s IPO and Public Debut
Circle debuted on the New York Stock Exchange (NYSE) on June 5, marking a historic moment for crypto’s integration into traditional markets. The firm is best known for issuing USDC, the second-largest stablecoin by market cap.
Here’s a breakdown of the IPO milestones:
| Date | Action |
|---|---|
| May 27, 2025 | IPO launched with 24M shares |
| June 2, 2025 | Target raised to 32M shares, aiming for $892M |
| June 4, 2025 | Final IPO target raised to 34M shares at $1.05B |
| June 5, 2025 | Shares soared over 200% in debut trading |
Despite its successful market performance, the fallout with Arca raises questions about Circle’s investor relationship management during the IPO.
🔍 Key Takeaways
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Arca submitted a $10M IPO order, received only $135K allocation
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Arca’s Jeff Dorman publicly criticized Circle’s handling of the offering
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Arca is closing all accounts and cutting ties with Circle
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Circle raised over $1 billion in its IPO and saw shares surge over 200%
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The incident spotlights tensions between crypto-native firms and TradFi practices
As Circle continues to expand its presence in traditional finance, this controversy highlights the delicate balance between loyalty to early crypto supporters and broader institutional ambitions.