Stablecoin issuer Circle has intervened in the Securities and Exchange Commission’s case against major crypto exchange Binance, arguing that financial trading laws shouldn’t spread to stablecoins whose value is tied to other assets.

In June, regulators charged Binance with multiple legal violations for facilitating trades in cryptocurrencies, such as solana's SOL, cardano's ADA and the Binance stablecoin BUSD, which the SEC alleged constituted unregistered securities.

That’s become one of the most major cases in crypto right now, as the world’s biggest crypto exchange – alongside rivals like Coinbase – seek to argue that crypto isn’t caught by existing heavy-handed U.S. financial laws.

Now Circle argues that assets tied to the dollar such as BUSD and its own USDC can’t constitute securities, in part because its users don’t expect any profit from standalone purchases.

“Payment stablecoins, on their own, do not have the essential features of an investment contract,” meaning they fall outside of SEC jurisdiction, Circle’s filing said. “Decades of case law support the view that an asset sale — decoupled from any post-sale promises or obligations by the seller — is not sufficient to establish an investment contract.”

The SEC alleged BUSD was sold as an investment contract because Binance marketed it as offering yield through reward programs. Binance, its U.S. arm and its owner Changpeng “CZ” Zhao last week filed to dismiss the SEC case, arguing the regulator is seeking authority over digital assets without congressional authorization.

Circle’s filing, known as an amicus curiae or friend of the court brief, is made in part by its Chief Legal Officer Heath Tarbert, himself former chair of the Commodity Futures Trading Commission, another federal regulator which is suing Binance.


All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Nothing published by CoinDesk constitutes an investment recommendation, nor should any data or Content published by CoinDesk be relied upon for any investment activities. CoinDesk strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin Price Forecast: Analysts anticipate increased volatility as the US presidential election looms

Bitcoin price teased its all-time high of $73,777 last week but declined to trade below $69,000 on Monday. Analysts suggest that market volatility is expected to rise as the US presidential election approaches.

More Bitcoin News
Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin poised for double-digit decline after breaking ascending trendline

Litecoin breaks and closes below an ascending trendline, signaling a change in market structure. On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.

More Litecoin News
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC, ETH and XRP decline ahead of US elections

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) all faced resistance at crucial levels ahead of the US Elections, leading to a price decline. As of Monday, they neared key support levels, and a firm close below these marks could signal further declines.

More Cryptocurrencies News
21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares files S-1 for XRP ETF amid ongoing tension between Ripple and SEC

21Shares filed an S-1 registration with the Securities and Exchange Commission (SEC) on Friday for an XRP exchange-traded fund (ETF). While the chance of approval is slim with the current SEC administration, the landscape could change after the upcoming elections.

More Cryptocurrencies News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP