Giant Bitcoin exchange Binance has received significant support in its battle against the SEC. Support came from Stablecoin issuer Circle. Let’s look at the details together.
Circle intervened in Binance – SEC case
Stablecoin issuer Circle made a move today. It has entered the fray in the ongoing legal battle between the US Securities and Exchange Commission (SEC) and Binance. The Circle’s intervention has an effect. It centers around the claim that financial trading regulations should not cover stablecoins whose value is pegged to other assets.
This legal dispute began in June, when the SEC filed multiple criminal charges against Binance, accusing the exchange of various legal violations related to facilitating cryptocurrency trades, including those involving tokens such as Solana’s SOL, Cardano’s ADA, and Binance stablecoin BUSD. appeared. The SEC alleges that these activities constitute the sale of unregistered securities.
Stablecoins: Not securities
Along with rivals like Coinbase, Binance is also trying to argue that cryptocurrencies should not be subject to the strict financial regulations currently in place in the US. For this reason, the case has become a major focus in the cryptocurrency industry.
Circle’s main argument focuses on assets like BUSD (Binance USD) and its own USDC (USD Coin). Accordingly, it revolves around the idea that these should not be classified as securities. One of the key points put forward by Circle is for users of this stablecoin. Accordingly, it is noted that they should not expect to make a profit through independent acquisitions.
What’s included in the application?
There is an important point in Circle’s legal application with Binance support. Accordingly, “Payment stablecoins, by themselves, do not have the essential characteristics of an investment contract.” There is an emphasis. It is stated that this situation does not fall within the SEC’s jurisdiction. The application also points out that the seller does not have any post-sale promises. It also introduces the idea that the sale of an asset devoid of liability does not constitute an investment contract. There are also pointers to decades of legal precedent supporting the idea. The SEC previously alleged that BUSD was marketed as an investment contract by Binance because the exchange promotes return-generating reward programs.
In response, Binance, its US arm and its CEO filed a motion to dismiss the SEC’s lawsuit. He also alleged that the regulator was trying to assert authority over digital assets without congressional authority. Circle’s response to the legal dispute includes input from Chief Legal Officer Heath Tarbert. It is noteworthy that Tarbert previously chaired the Commodity Futures Trading Commission (CFTC), another federal regulatory agency that is pursuing a separate legal action against Binance.
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