Crypto Research Firm Paradigm Files Amicus Brief in SEC vs. Binance Case
Crypto research firm Paradigm has submitted an amicus brief in the ongoing court battle between the US Securities and Exchange Commission (SEC) and Binance, its US affiliate Binance.US, and Binance’s CEO Changpeng “CZ” Chao. The SEC filed a lawsuit against the defendants in June, accusing them of operating unlicensed exchanges and broker-dealers. Paradigm, which claims to have no interest or investment in the defendants, has taken a stance against the SEC, accusing the commission of governmental overreach.
SEC Accused of Attempting to Rewrite the Law
According to Paradigm, the SEC is trying to bypass the rulemaking process and rewrite the law by utilizing the allegations in its lawsuit against Binance. Paradigm argues that if the SEC’s prayers are granted, it would mean accepting the commission’s theory that an “investment contract” does not require an actual contract. The research firm disputes this theory, stating that case law clearly states that an investment contract necessitates a contractual agreement promising future appreciation of an asset. Additionally, Paradigm argues that extending US securities laws to all types of assets bought with the anticipation of price appreciation would be a dangerous precedent.
Paradigm Calls for Clear Crypto Regulations
Paradigm calls for clear crypto regulations that empower the SEC’s oversight over the cryptocurrency space. The firm believes that relying on the Howey Test, a 77-year-old legal test, does not provide sufficient clarity for regulating such a diverse industry. Paradigm concludes that the SEC’s attempts to enforce crypto regulation through an unreasonable interpretation of investment contracts based on this test fail the Major Question Doctrine and require congressional intervention.
Hot Take: Paradigm Challenges SEC’s Overreach in Binance Case
Paradigm, a crypto research firm, has filed an amicus brief in the ongoing court case between the SEC and Binance, accusing the commission of governmental overreach. The research firm argues that the SEC is trying to rewrite the law by claiming that an “investment contract” does not need an actual contract. Paradigm warns against extending US securities laws to all assets bought with the expectation of price appreciation. The firm calls for clear regulations that empower the SEC’s oversight over the cryptocurrency space and criticizes the reliance on outdated legal tests. Paradigm believes that congressional intervention is necessary to address these issues.
By
By
By
By
By