Circle, the issuer of the stablecoin USD Coins, has weighed in on the ongoing dispute between the US Securities and Exchange Commission and Binance. According to reports, the Commission has filed a lawsuit against Binance for offering unregistered securities to its consumers. This includes BNB and BUSD provided by BAM Trading, a BInance affiliate.
Also in the ropes is its Chief Executive Officer, Changpeng Zhao. Binance and its CEO have been accused of violating securities laws, with the lawsuit dating back to June this year.
As the case is in progress, Circle has come out to clarify that its ideal product, which is a stablecoin, is not a security. A reason being quoted to justify this statement is that holders of USDC do not expect profits from this specific portion of their portfolio. More specifically, Circle has claimed that its stablecoins are designed in such a way that they do not have the essential features of an investment contract. Hence, it does not fall under the jurisdiction of the SEC.
Circle coming out in defense is likely to be a sign that most of the crypto ventures are running in panic mode. The SEC has been going after them almost every day. The most recent one, for instance, is its lawsuit with XRP. Gary Gensler was last seen avoiding questions about their legal battle with XRP. He said that while he is happy to talk about the work done by the SEC, he is not at liberty to discuss matters that are under investigation per the law.
The House Financial Services Committee questioned Gary.
Articles surfacing claim that he was grilled for 5 hours. Given the facts, it’s reasonable to assume that he was asked about the nature and purpose of the Commission and how it relates to the definition of cryptocurrency assets. The notion of Gensler being grilled definitely took some air after it was made public that he was thoroughly questioned about his opposition to the country’s and its residents’ financial growth.
Gensler stood by his original stance, claiming that crypto ventures can register as per compliance, but they are choosing not to do so. He then justified all the actions and cases by saying that customers and people in the US have not done something that makes them undeserving of being protected by their securities laws.
The legal dispute between the SEC and Binance is acquiring momentum. As a result of how the SEC vs. XRP verdict is formulated, the tide is anticipated to reverse. In fact, most crypto ventures are awaiting this verdict, as only then will they be able to make a move on the market, asserting that there is now a fundamental basis for them to continue operating as they have been.
Another scenario is that the SEC finds a way to take on all the crypto ventures, including, but not limited to, Circle and Binance.