Circle Defends Stablecoins Amidst SEC’s Lawsuit Against Binance
In the unfolding legal battle between the US Securities and Exchange Commission (SEC) and Binance, a major cryptocurrency exchange, Circle, a stablecoin issuer, has stepped in. Circle contests that stablecoins, such as BUSD and its own USDC, should not be classified as securities under current financial regulations. This intervention comes in the wake of Binance facing multiple legal charges earlier this year, based on the platform’s role in facilitating transactions involving several cryptocurrencies that the SEC deems unregistered securities.
Circle’s argument pivots on the idea that stablecoins, which are designed for payments, are not investment contracts and are hence beyond the SEC’s jurisdiction. Circle’s filing also states that users of such stablecoins do not anticipate profiting from individual purchases. This point is particularly significant, especially in the face of the SEC’s assertion that Binance had endorsed BUSD by claiming it offered yield via reward programs.
The SEC’s lawsuit against Binance accuses the exchange of enabling transactions in cryptocurrencies like Solana’s SOL, Cardano’s ADA, and the stablecoin BUSD, which the SEC considers unregistered securities. Binance, in response, has filed a motion to dismiss the SEC’s case, alleging overreach of authority by the regulator in governing digital assets without proper congressional authorization.
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