Quick Take
Circle, the company responsible for the stablecoin USDC, recently entered the legal battle between the U.S. Securities and Exchange Commission (SEC) and Binance, the leading cryptocurrency exchange.
Background of the SEC’s Case Against Binance
In June, the SEC filed a lawsuit against Binance and its CEO Changpeng Zhao, accusing them of violating local securities laws. The lawsuit alleged that Binance’s affiliate, BAM Trading, sold unregistered securities, including BNB and stablecoin BUSD.
Circle’s Defense of Stablecoins
In a filing made on Thursday, Circle argued that stablecoins designed for payments do not possess the fundamental characteristics of an investment contract. According to Circle, users of these stablecoins do not anticipate making profits from holding them, as reported by CoinDesk.
Circle’s Previous Concerns About U.S. Bank Failures
This development follows statements made by Dante Disparte, Circle’s chief strategy officer, about the impact of U.S. bank failures on local stablecoin issuers. Disparte noted that these failures had compelled investors to turn to “unsafe, opaque” cryptocurrencies abroad.
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