Circle’s stellar NYSE debut Thursday quickly soured after longtime partner and crypto investment firm Arca publicly torched the stablecoin issuer over what it called a betrayal of crypto-native allies in favor of Wall Street.
Shares of Circle (CRCL.N), the company behind the USDC stablecoin, opened at $69, more than doubling its IPO price of $31 and peaked at $103.75 before settling slightly lower by market close. The IPO raised about $1.05 billion, positioning it as one of the largest public entries by a crypto-native firm since Coinbase. But not everyone was celebrating.
In a now-deleted blistering open letter posted on X, Arca CIO Jeff Dorman blasted Circle over its IPO allocation process, accusing the company of sidelining longtime crypto supporters to cozy up with traditional financial (TradFi) institutions.
“For almost a decade Arca has been a customer and a partner,” Dorman wrote. “We’ve defended USDC and stablecoins to every institution on the planet who called you and this industry a joke, including numerous conversations with the SEC on your behalf.”
Allocation fails to meet expectations
Dorman said Arca requested a $10 million allocation in Circle’s IPO and placed the order on April 8, the first day of the roadshow. What they got: $135,000, or about 1.35% of what they asked for.
“You thank us by giving Arca a measly $135k allocation to your IPO on a $10 million order?” he continued. “An order that we put in on DAY 1 of the IPO roadshow, on April 8th, when everyone else was running from your deal because of tariffs, and it almost got pulled.”
Arca, which has supported Circle through multiple crypto winters, including the March 2023 banking crisis that temporarily depegged USDC, sees this as a clear betrayal. Dorman painted the decision as more than an oversight; he called it a full pivot away from crypto ethos.
Dorman went on to accuse Circle of prioritizing big-name TradFi investors who “likely didn’t even read your prospectus, have no wallets, and will never use your product.”
The ethos of crypto is reward your customers, not just passive shareholders.
Hope Circle demands that JPM allocates shares to crypto funds that have been using USDC & Circle for almost a decade rather than allocate to TradFi funds who probably didn’t even read the prospectus. https://t.co/zC4gJwiuFq
— Jeff Dorman (@jdorman81) June 4, 2025
Arca goes nuclear
That’s not just talk. Arca is cutting all business ties with Circle. “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 wrote. “If you want to see how irrelevant and generic your product has become, this is a decision that was easy to make and doesn’t affect our business one bit because there are perfect substitutes everywhere.”
The fallout points to an ongoing identity crisis in crypto: how do you scale while staying loyal to the early believers who got you there? For companies like Circle, the road to public markets often runs through institutional capital. But Dorman’s remarks underscore that the path may come with reputational costs in the very ecosystem that birthed these startups.
Dorman, whose team left Wall Street nearly a decade ago to build a crypto-native firm, said the turnabout is bitterly ironic. “You’ve come full Circle,” he wrote.
Collision of historical crypto relationships and new-found Wall Street love
Circle has not issued a public response to Arca’s accusations. The company’s IPO was, by most metrics, a success. Investor interest was strong, pricing came in above the projected $27–$28 range, and the debut was met with enthusiasm across mainstream financial media.
But the public rift with Arca casts a shadow on that success and raises uncomfortable questions about how crypto-native firms navigate their maturation. Can you go public without abandoning your roots? Should crypto companies follow TradFi playbooks? Or is there a third way?
For Arca, at least, the verdict is in.
“You and Coinbase deserve each other,” Dorman concluded. “A match made in heaven of two incompetent management teams who were early, but screw up everything you touch.”
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