Circle Intervenes in Binance SEC Case, Argues Stablecoins Aren’t Securities
Stablecoin issuer Circle has entered the legal battle between the Securities and Exchange Commission (SEC) and crypto exchange Binance. In its amicus curiae brief, Circle argued that stablecoins, which are backed by other assets, should not be subject to the same regulatory scrutiny as traditional securities. The SEC’s case against Binance centers on allegations of multiple legal violations related to cryptocurrency trades.
SEC Claims BUSD is an Investment Contract
The SEC is scrutinizing assets like Binance’s stablecoin BUSD, Solana’s SOL, and Cardano’s ADA, claiming they constitute unregistered securities. This case is crucial for the crypto industry in the United States. Binance, along with competitors like Coinbase, asserts that cryptocurrencies should not face stringent financial regulations.
Stablecoins Shouldn’t be Classified as Securities
Circle argues that stablecoins linked to the US dollar, such as BUSD and its own USDC, should not be considered securities. Users of these stablecoins do not expect to profit from their standalone purchases. Circle also cites legal precedents showing that the sale of an asset without post-sale commitments or obligations does not establish an investment contract.
The SEC claims that BUSD was marketed as an investment contract due to Binance’s promotion of yield opportunities. Binance, its US subsidiary, and CEO CZ Zhao have filed for the dismissal of the SEC case, arguing that the regulator lacks necessary congressional authorization over digital assets.
Hot Take: Circle Joins Battle Against SEC Over Stablecoin Regulation
Circle has joined the ongoing legal fight between Binance and the SEC over whether stablecoins should be classified as securities. Circle argues that stablecoins like BUSD should not face the same regulatory scrutiny as traditional securities. The SEC claims that BUSD, along with other cryptocurrencies, constitutes unregistered securities. This case has significant implications for the US crypto industry. Binance and other industry players maintain that cryptocurrencies should not be subjected to strict financial regulations. The outcome of this legal battle could shape the future of the crypto industry in the United States.
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