Paradigm files an amicus brief in the SEC lawsuit against Binance.
The platform points out the SEC’s “capacious” and “unreasonable” norms, highlighting the need for Congressional authorization.
Per their official announcement, Paradigm opposes the SEC’s gambit despite the platform’s non-involvement with Binance.
The research-driven technology investment firm Paradigm recently filed an amicus brief in the Securities and Exchange Commission’s (SEC) legal war against Binance. In an official statement, Paradigm asserted that they strongly oppose the regulator’s “gambit” despite the platform’s non-involvement with Binance.
On September 29, Paradigm submitted the amicus brief in the SEC-Binance lawsuit to seek justice for the crypto exchange, claiming that the SEC’s theories contradicted the crypto communities’ knowledge of the securities laws. The platform pointed out the “critical” ways in which the SEC’s norms are vague.
The first point Paradigm spotlighted was the regulator’s insistence on the Court to accept the “facially incredible argument that an ‘investment contract’ does not require a ‘contract.’” The firm added,
The clear statutory language and case law interpreting it makes clear that an “investment contract” requires contractual undertakings that promise the delivery of future value. A crypto asset sale, particularly one on secondary markets, promises nothing, other than the delivery of the crypto asset. The SEC cannot manifest a formal contract where none exists through clever lawyering.
As the second key idea, the platform sheds light on the SEC’s tactics to categorize all sorts of sales under the same securities law that upends the court’s long-held fact that an asset’s appreciation in value due to market forces does not adequately mean a “reasonable expectation of profits.” Elaborating on the lack of connection between the asset issuer and a secondary purchaser, Paradigm stated, “A shared hope that an asset will appreciate in value might create a common interest, but that hope does not constitute a common enterprise.”
Finally, the firm questioned the SEC’s “capacious” and “unreasonable” interpretation of the investment contract, reiterating the need for a “clear congressional authorization” for a convenient and comprehensive crypto regulation. Paradigm added, “Only Congress can and should fill those gaps, not the SEC.”
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