Stablecoin issuer Circle has entered the ongoing legal battle between the U.S. SEC and cryptocurrency exchange Binance.
Circle argues that stablecoins like BUSD and USDC, designed for payments, should not be categorized as securities under existing financial regulations. Their argument is based on the idea that payment stablecoins lack the attributes of investment contracts.
This development follows earlier SEC allegations against Binance for enabling transactions in cryptocurrencies considered unregistered securities.
The SEC’s case against Binance focuses on its alleged facilitation of transactions involving various cryptocurrencies, including BUSD, which the SEC claims was presented as an investment contract due to Binance’s promotional activities. In response, Binance filed a motion to dismiss the case, contending that the SEC exceeded its authority in regulating digital assets.
Circle’s involvement, in the form of an amicus curiae brief, is supported by its Chief Legal Officer, Heath Tarbert, a former chair of the Commodity Futures Trading Commission, which is also pursuing legal action against Binance. Circle argues that stablecoins primarily designed for payments do not fall within the SEC’s regulatory purview.
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