- The platform criticizes the SEC’s extensive and unjustified regulations, emphasizing the importance of Congressional authorization.
- According to their official statement, Paradigm expresses disagreement with the SEC’s actions, even though the platform itself is not directly connected to Binance.
- Paradigm submits an amicus brief in the SEC’s lawsuit against Binance.
Research-based technology investment firm Paradigm has taken a strong stance against the SEC’s actions in its legal battle with Binance. Although not directly involved with Binance, Paradigm has denounced the regulator’s tactics as a “maneuver.”
In a recent official statement, Paradigm announced that it has filed an amicus brief in the SEC’s lawsuit against Binance. The purpose of this brief is to support cryptocurrency exchanges and seek justice, as Paradigm believes the SEC’s theories conflict with the crypto communities’ knowledge regarding securities laws.
The model highlighted several important points in his amicus brief. First, they question the SEC’s insistence that the Court accept the argument that an “investment contract” does not require a “contract.” The model argues that plain statutory language and interpretation of case law indicate that an “investment contract” entails contractual undertakings that promise to deliver future value. They strongly stipulate that the sale of cryptoassets, especially on secondary markets, promises nothing more than the delivery of cryptoassets, and the SEC cannot create a formal contract if none exists.
Second, the model highlights the SEC’s tactics of classifying different sales under the same securities law, ignoring the long-standing understanding that an appreciation in asset value due to market forces does not necessarily indicate a “reasonable expectation of earnings.” The model emphasizes that there is no connection between the issuer of the asset and the secondary buyer, and although the shared hope that the value of the asset will rise may create a common interest, it does not constitute a joint venture.
Finally, Paradigm questions the SEC’s interpretation of the investment contract as “broad” and “unreasonable.” They stress the need for clear authorization from Congress to establish adequate and comprehensive regulation of cryptocurrencies, noting that only Congress has the authority to fill any loopholes in regulation, not the SEC.
In sum, Paradigm’s amicus brief in the SEC’s lawsuit against Binance highlights their opposition to the regulator’s actions, underscores the importance of congressional authorization to regulate cryptocurrencies, and raises concerns about the SEC’s interpretation of investment contracts.