Circle, the company behind the USD Coin (USDC) stablecoin, intervened in the United States Securities and Exchange Commission (SEC) case against cryptocurrency exchange Binance, arguing that stablecoins are not securities.
In a court filing, Circle argument that assets pegged to the US dollar, such as Binance USD (BUSD) or USDC, are not securities because those who purchase the assets do not expect any benefit from purchasing them. According to Circle, payment stablecoins do not have the “characteristics of an investment contract” on their own.
On June 5, the SEC sued Binance for several alleged legal violations. The regulator filed a total of 13 charges against the crypto exchange. The charges include the sale of BNB tokens (BNB) and BUSD tokens which are sales of unregistered securities. The SEC also claims that Binance did not register as a broker-dealer clearing agency and that it operated illegally in the United States.
On September 22, Binance and its CEO Changpeng Zhao asked the court to dismiss the SEC’s lawsuit. Binance and Zhao claimed that the SEC had exceeded its authority in the lawsuit against them. In a petition, attorneys for Binance and Zhao highlighted their belief that the SEC failed to introduce clear guidelines for the sector prior to its lawsuit against the exchange and imposed its authority over the industry retroactively.
Related: crypto Lawyer on SEC: ‘It’s problematic to imply that all NFTs are securities’
In addition to cryptocurrencies and exchanges, the SEC has also affirmed that non-fungible tokens (NFTs) are securities. On August 28, the SEC filed an indictment against entertainment company Impact Theory over sales of its nft collection. The SEC said NFTs are unregistered securities.
In addition to Impact Theory, on September 13, the SEC charged the company behind the Stoner Cats nft series. According to the SEC, the company facilitated the sale of unregistered securities to offer NFTs to the public.
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