- • • •
Circle, the issuer of USDC stablecoin, has filed an amicus curiae request in support of Binance.
• • • •
According to Circle, financial trading laws should not affect stablecoins whose value is tied to other assets.
• • • •
Circle’s chief legal officer says stablecoins cannot be classified as investment contracts.
Or an amicus curiae brief in support of Binance in the ongoing case before the Securities and Exchange Commission (SEC). According to Circle, financial trading laws should not affect stablecoins whose value is tied to other assets.
The amicus curiae was created in part by its chief legal officer, Heath Tarbert, former chairman of the Commodity Futures Trading Commission (CFTC). According to the filing, payment stablecoins cannot be classified as investment contracts. Part of the file reads:
“Payment stablecoins, by themselves, do not have the essential features of an investment contract,” meaning they fall outside the SEC’s jurisdiction. Decades of case law supports the view that the sale of assets, separate from any post-sale promises or obligations by the seller, is not sufficient to create an investment contract.
The Securities and Exchange Commission has filed a lawsuit against Binance, the world’s leading cryptocurrency exchange by trading volume, accusing it of committing numerous legal violations for facilitating cryptocurrency trading. In its filing, the SEC claimed that Solana’s SOL, Cardano’s ADA, and Binance’s stablecoin BUSD constitute unregistered securities.
According to the SEC, Binance marketed BUSD as an offering return through its bounty programs. Thus, Binance sold the stablecoin as an investment contract. The SEC’s allegation has raised many eyebrows among stakeholders in the cryptocurrency industry, as the current case has emerged as one of the major cases in the industry this year.
. She said the SEC is not authorized by Congress to seek authority over digital assets.
Binance, in collaboration with its US subsidiary and founder Changpeng Zhao (CZ), has since done so
She filed a lawsuit to dismiss the SEC
According to Circle, Binance BUSD and other stablecoins like its USDC are pegged to the US dollar. Therefore, they cannot be classified as securities. Part of Circle’s argument is that stablecoins do not provide independent profit opportunities for users who purchase them.