The Circle’s Position on Stablecoins
As the legal battle between the SEC and the renowned cryptocurrency exchange platform Binance continues, new developments are emerging with the entry of the giant Circle. Specifically, US District Judge Amy Berman Jackson of the District of Columbia has signed multiple orders to navigate through the stacked motions before a significant upcoming hearing.
The Circle’s Position on Stablecoins
Among these developments, a notable move has been the recognition of an amicus brief filed by Circle, the issuer of the USDC stablecoin. Earlier, on September 29, Circle clarified its position in the SEC vs. Binance litigation by emphasizing that dollar-backed assets like USDC should not be categorized as securities. The central argument presented by Circle revolves around the notion that buyers of stablecoins are not motivated by profit expectations when acquiring these digital assets.
Payment stablecoins do not have the characteristics of an investment contract in themselves.
Circle
In light of these arguments, Judge Jackson has authorized Circle’s role as an amicus curiae, which means ‘friend of the court.’ This means that although Circle is not directly involved in the lawsuit, it is allowed to offer its expertise to help the court’s decision-making process. However, the court has clearly indicated that Circle’s participation in oral arguments will be subject to its explicit approval.
Overview: The SEC vs. Binance Saga
The legal dispute began when the SEC filed a comprehensive complaint against Binance on June 5, advancing 13 separate charges. At the heart of these allegations are the sales of unregistered securities related to the BNB and Binance USD (BUSD) tokens. Additionally, the SEC highlighted Binance’s alleged negligence to register as an exchange and its unauthorized operations within US borders.
In a counterattack on September 22, Binance and its CEO, Changpeng Zhao, sought to have the lawsuit dismissed. Their challenge is rooted in the belief that the SEC exceeded its jurisdictional limits. Binance and CZ’s legal representation further argued that the SEC’s lawsuit preceded the establishment of clear regulatory standards for the crypto domain, alleging an unjustified imposition of its jurisdiction over their operations.
