Circle, the organization behind the USD Coin (USDC) stablecoin, has presented its perspective regarding the U.S. Securities and Exchange Commission’s (SEC) lawsuit against the cryptocurrency platform, Binance. Circle contends that stablecoins, which are cryptocurrencies tied to stable assets like the U.S. dollar, should not be classified as securities.
In their legal document, Circle posits that dollar-linked assets like Binance USD (BUSD) and USDC cannot be securities as those acquiring them don’t anticipate generating profit. Circle further elaborated that these payment-focused stablecoins lack the essential characteristics of investment contracts.
Earlier on June 5, the SEC initiated legal proceedings against Binance, attributing a series of purported legal transgressions to the exchange. Among the 13 charges levied, the SEC has accused Binance of unregistered sales of its BNB and BUSD tokens. Furthermore, the regulatory body alleges that Binance failed to register as a broker-dealer clearing agency and unlawfully operated within the U.S.
On September 22, Binance, along with its CEO Changpeng Zhao, petitioned for the lawsuit’s dismissal, arguing that the SEC overreached its jurisdictional boundaries. Their legal team emphasised that the SEC failed to provide transparent regulatory guidelines for the crypto industry before filing the lawsuit, suggesting that the SEC retroactively asserted its authority.
