Circle Weighs in on SEC Case Against Binance
Circle, the company responsible for the stablecoin USDC, has entered the U.S. Securities and Exchange Commission’s (SEC) legal battle with Binance.
In June, the SEC sued Binance and its CEO Changpeng Zhao for alleged violations of local securities laws. The lawsuit claimed that Binance’s affiliate, BAM Trading, sold unregistered securities, including BNB and stablecoin BUSD.
Stablecoins as Payment Tools, Not Securities
In a recent filing, Circle argued that stablecoins designed for payments do not meet the criteria of an investment contract and therefore do not fall under the jurisdiction of the SEC. The company also asserted that users of these stablecoins do not expect any profit from holding them.
This stance is supported by a report from CoinDesk.
Circle’s Concerns about Bank Failures
Just over a month ago, Dante Disparte, Circle’s chief strategy officer, expressed concerns about bank failures in the U.S. and their impact on local stablecoin issuers. He stated that this situation had driven investors towards “unsafe, opaque” cryptocurrencies abroad.
Hot Take: Circle Defends Stablecoins in SEC Case Against Binance
Circle has joined the legal battle between the SEC and Binance by asserting that stablecoins designed for payments should not be considered securities. This move highlights the ongoing debate surrounding regulatory oversight of cryptocurrencies and their classification. While Circle argues that stablecoins lack the essential features of an investment contract, it remains to be seen how the court will interpret this argument in relation to Binance’s case. As the case unfolds, it will likely have significant implications for both stablecoin issuers and regulatory bodies seeking to establish clarity in the crypto space.
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