Leading venture capital firm Paradigm has slammed what it sees as a departure from standard regulatory procedures by the US Securities and Exchange Commission (SEC) in the current Binance case. In a statement published on September 29, Paradigm claimed that the SEC was trying to reshape the legal framework by using its complaints against Binance to make changes to regulations without adhering to established regulatory processes.

Paradigm stated that the SEC had overstepped its regulatory boundaries and strongly opposed this unconventional approach. The SEC filed a lawsuit against Binance in June, citing various violations of securities laws.

Additionally, Paradigm expressed concerns regarding the SEC's application of the Howey test. Citing examples such as gold, silver and fine arts, Paradigm emphasized that the potential for value increase does not cause its sales to be classified as securities transactions.

In a related development, Circle, the issuer of USD Coin (USDC), has become involved in the ongoing legal dispute between Binance and the SEC. Circle argues that stablecoins should not be classified as securities by the SEC.