<\/p>\n
In a significant development in the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and major cryptocurrency exchange Binance, stablecoin issuer Circle has intervened, asserting that stablecoins should not be categorized as securities under existing financial regulations.<\/p>\n
This comes after earlier this year, Binance faced several legal accusations from regulators with the charges based on the exchange\u2019s role in enabling transactions in multiple cryptocurrencies that the SEC claimed constituted unregistered securities.<\/p>\n
Circle\u2019s argument centers around the premise that stablecoins like BUSD and its own USDC, designed for payments, are not investment contracts and, therefore, fall outside of SEC jurisdiction.<\/p>\n
\n\u201cPayment stablecoins, on their own, do not have the essential features of an investment contract,\u201d stated Circle in its filing. \u201cDecades of case law support the view that an asset sale \u2014 decoupled from any post-sale promises or obligations by the seller \u2014 is not sufficient to establish an investment contract.\u201d<\/p>\n<\/blockquote>\n
The filing also argued that users of these stablecoins do not expect to gain any profits from individual purchases. This argument holds weight, particularly when considering the SEC\u2019s accusation that Binance promoted BUSD by claiming it offered yield through reward programs.<\/p>\n
SEC\u2019s Lawsuit Against Binance<\/h2>\n
The SEC\u2019s case<\/a> against Binance involves them alleging that the cryptocurrency exchange had enabled transactions in cryptocurrencies such as Solana\u2019s SOL, Cardano\u2019s ADA, and the stablecoin BUSD. According to the agency, these cryptocurrencies are unregistered securities, leading to the charges against Binance.<\/p>\n
The SEC argued that BUSD was presented as an investment contract because of Binance\u2019s promotional activities, which included offering yield through reward programs. In response, Binance, its U.S. arm, and its CEO Changpeng \u201cCZ\u201d Zhao filed a motion to dismiss<\/a> the SEC\u2019s case, claiming that the regulator exceeded its authority by regulating digital assets without proper congressional authorization.<\/p>\n
Circle\u2019s involvement, referred to as an amicus curiae or \u201cfriend of the court\u201d brief, was backed by its Chief Legal Officer, Heath Tarbert, a former chair of the Commodity Futures Trading Commission, another federal regulator that is simultaneously pursuing<\/a> legal action against Binance.<\/p>\n
\nSPECIAL OFFER (Sponsored)<\/span>
\nBinance Free $100 (Exclusive): Use this link<\/a> to register and receive $100 free and 10% off fees on Binance Futures first month<\/b> (terms<\/a>).<\/p>\n