Circle Argues Stablecoins Are Not Securities in Response to SEC Case Against Binance
Crypto company Circle, the creator of USD Coin (USDC), has provided its perspective on the ongoing case between the United States Securities and Exchange Commission (SEC) and Binance. Circle argues that stablecoins like Binance USD (BUSD) and USDC should not be classified as securities because they do not offer any profit to investors. According to Circle, payment stablecoins lack the characteristics of an investment contract.
The SEC’s Lawsuit Against Binance
In early June, the SEC filed a lawsuit against Binance, accusing the crypto exchange of multiple legal violations. The regulator brought forth 13 charges, including unregistered security sales of BNB and BUSD tokens, failure to register as a broker-dealer clearing agency, and illegal operations in the US. On September 22, Binance and its CEO Changpeng Zhao requested the dismissal of the SEC lawsuit, arguing that the SEC exceeded its authority and failed to provide clear guidelines for the industry.
SEC’s Stance on NFTs
Besides cryptocurrencies and exchanges, the SEC has also classified nonfungible tokens (NFTs) as securities. In August, the SEC charged entertainment company Impact Theory for selling unregistered securities through its NFT collection. Similarly, on September 13, the SEC filed charges against Stoner Cats NFT collection for offering unregistered securities to the public.
Hot Take: Stablecoins Navigate Regulatory Challenges
The ongoing case between the SEC and Binance highlights the regulatory challenges faced by stablecoins and other crypto assets. Circle’s argument that stablecoins should not be considered securities emphasizes their role as digital currencies rather than investment instruments. As regulatory bodies continue to grapple with the classification of various crypto assets, clear guidelines and frameworks are necessary to ensure a fair and transparent regulatory environment for the industry.
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