Circle, FT Partners Locked in Legal Fight Over Advisory Fees

A dispute between stablecoin issuer Circle and financial advisory firm Financial Technology Partners (FT Partners) reportedly spilled into the courts, with the companies engaged in a lawsuit over millions of dollars in advisory fees.

The conflict originates from a 2020 agreement, in which FT Partners was hired to advise Circle on selling and raising capital, according to a March filing included in a Justia report.

Under the contract, FT Partners stood to receive substantial fees, including a percentage of capital raised and payouts for large company sales, Legal.io reported June 6.

Circle ended the relationship with FT Partners before its initial public offering (IPO), which drew the ire of the advisory firm. FT Partners claims Circle’s termination was an attempt to dodge tens of millions of dollars in contractually owed fees, particularly after Circle went public and completed high-profile business deals, according to the Legal.io report.

Circle, for its part, said it terminated FT Partners for valid reasons and disputes that it owes additional fees, the Financial Times reported June 20.

The company has fought to have portions of FT Partners’ lawsuit dismissed, securing a partial legal victory in March when a judge dropped several claims, according to the Justia report. Still, other parts of the case are moving forward in federal court.

Filings show Circle has already spent about $11.4 million on legal costs linked to this and other disputes last year and in the first three months of this year, and it has warned investors that an unfavorable judgment could require large cash and equity payments and fees, Bloomberg Law reported June 5.

When Circle went public June 5, its price tripled by the day’s close, PYMNTS reported at the time. After pricing its IPO at $31 per share, its share price ultimately closed at $83.23, pushing the company’s value north of $18 billion.

The outcome of this litigation could influence future agreements between FinTech firms and their advisors, as the case puts a spotlight on how lucrative — and contentious — fee arrangements have become in the fast-moving digital assets industry. For now, both sides remain locked in a legal battle with major financial implications on the line.