$100 Million Deal Hides Complex Commercial Agreement Between Binance and Circle

The recent $100 million investment by Binance in Circle's Class A common stock has left some scratching their heads. The deal, which closed on September 17, saw Binance purchase 1,237,011 shares at $80.84 per share, a discount of about 5% from the current market price.

The real focus, however, is not the investment itself but rather the commercial agreement between the two parties. According to Circle's 8-K filing with the SEC, the agreement includes a monthly incentive fee paid by Circle to Binance based on USDC holdings, which are stored in Circle's modular smart contract wallet infrastructure services.

This structure is not as straightforward as it seems. While Binance holds an equity stake, its voting rights during the two-year lockup period belong to Binance. This means that Circle pays Binance a fee based on USDC balances, effectively making Binance a shareholder while also collecting promotional fees from Circle.

The numbers tell a story of their own. In 2025, distribution costs related to Binance increased by $152.1 million, with the majority going to Coinbase as part of its co-founder role in USDC. This is consistent with the structure of the August 2025 version of the agreement, which saw Circle pay Binance a one-time upfront fee of approximately $60.3 million.