Circle’s interest leans on the matter of classification of Binance-backed BUSD stablecoin as a security.
Stablecoin issuer Circle has stepped into the US Securities and Exchange Commission (SEC) case against Binance. Circle argues that digital assets backed by other assets shouldn’t be subject to securities laws in the same vein as traditional securities.
Circle files amicus curiae
Circle filed an amicus curiae on Thursday against the SEC in a move to protect its interests in the regulator’s case against Binance.
An amicus curiae or Latin for “friend of the court” is a an individual or group not directly involved in a case but with significant interest in the result, decision, or order that may be delivered by the court.
Circle’s interest leans on the matter of classification of Binance-backed BUSD stablecoin as a security. While many have kicked against the classification by the SEC, Circle has argued that financial trading regulations applied to assets like the US Dollar should not apply to stablecoins.
Circle contends that these assets, which are backed by other assets, ought to be free from the regulations governing financial trade. They contend that stablecoins are not securities because consumers do not expect to profit from individual purchases of them.
“Payment stablecoins, on their own, do not have the essential features of an investment contract,” Circle’s filing said.
Circle also cites decades’ worth of legal precedents to back up the claim that the sale of an asset, when separated from any commitments or duties made by the seller after the transaction, does not constitute an investment contract.
“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.”
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