Circle joins Binance vs. SEC Case, defending stablecoins. The company argues stablecoins differ from securities as users don't expect profits. The case has major implications for the crypto industry's regulatory landscape. In a significant development, Circle, the company responsible for the popular stablecoin USDC, has entered the legal fray surrounding the Securities and Exchange Commission’s (SEC) case against major cryptocurrency exchange Binance, CoinDesk first reported the news. Circle Takes a Stand in Binance vs. SEC Case Over Stablecoins
Circle's intervention comes with the argument that stablecoins, whose value is anchored to underlying assets, should not be subjected to the same regulatory scrutiny as traditional securities.
Binance vs. SEC Case, which began in June and involved allegations of multiple legal violations pertaining to the exchange's handling of cryptocurrency trades, has attracted considerable attention in the crypto world. Circle, in its amicus curiae brief, has contended that stablecoins, including its own USDC and Binance's BUSD, both pegged to the U.S. dollar, should not be categorized as securities.
The Future of Stablecoins in Crypto
One of Circle's key points is that users of these stablecoins do not anticipate profiting from their standalone purchases, differentiating them from traditional securities. Additionally, Circle references long-standing legal precedents that support the argument that the sale of an asset, when devoid of any post-sale commitments or obligations by the seller, does not constitute an investment contract.
Circle's recent filing asserts that stablecoins designed for payments lack the essential features of an investment contract, thus falling outside the SEC's jurisdiction. This development is crucial in the ongoing debate within the crypto industry, where major exchanges like Binance and Coinbase are striving to assert that cryptocurrencies should not be subject to existing stringent U.S. financial regulations.
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