Binance is currently dealing with a regulatory challenge from the SEC. While recent developments, such as data leaks and CZ’s controversial tweets, may not directly impact the ongoing case, they could create complications down the road.
One key aspect to explore is Circle’s involvement in this situation and how these two entities might end up supporting each other. Here’s what you need to know.
Circle’s Amicus Curiae Submission: Its Significance and Relevance
As the pivotal hearing on October 12 approaches in the SEC’s lawsuit against Binance, there’s a significant development involving Circle, the issuer of the popular stablecoin USD Coin (USDC).
District Judge Amy Berman Jackson in the US District Court for the District of Columbia has taken several important steps in preparation for the upcoming hearing. One of these actions concerns pending motions related to the SEC’s legal action against Binance. Among these motions, Circle’s amicus brief is noteworthy. This decision adds a new layer of complexity to the closely-watched SEC vs Binance case.
Circle has been approved as amicus curiae in the #SEC vs. @binance lawsuit. Before the key hearing today, the judge greenlit Circle's amicus curiae brief. @circle had filed a motion on Sept 29, asserting assets pegged to the US dollar, like USDC, aren't securities.
An amicus… pic.twitter.com/ObeyfCDzY3
— Andres Meneses (@andreswifitv) October 12, 2023
Circle’s amicus brief, submitted on September 29, presents a fundamental argument: stable assets like USDC, which are tied to the US dollar, should not be classified as securities. Circle contends that individuals who buy stablecoins do not do so with the expectation of making a profit; instead, these coins are primarily used as a means of exchange. According to Circle, stablecoins lack the characteristics that would categorize them as “investment contracts.”
Binance’s Response to Circle’s Amicus Brief
Judge Jackson’s acceptance of Circle as an amicus curiae allows the company to offer its viewpoint on the case without favoring Binance or its CEO, Changpeng Zhao, in their efforts to dismiss the lawsuit. Yet, Circle will need explicit court permission to participate in oral arguments.
Judge’s Important Decisions
Moreover, Judge Jackson approved the pro hac vice status for multiple attorneys, permitting them to engage in the case despite not being licensed to practice law within the jurisdiction. These attorneys, however, must complete electronic filing training and comply with associated prerequisites.
What’s Coming Next?
In related news, crypto research firm Paradigm filed an amicus brief in the same lawsuit, opposing the SEC’s stance. Paradigm accused the commission of governmental overreach and attempted to rewrite the law by leveraging “disturbing allegations” against Binance and its co-defendants.
Previously, Binance had taken action against the SEC by filing a joint motion to dismiss the lawsuit, including Bam Management Holdings Inc., affiliated with Binance.
Binance’s alleged involvement in the collapse of FTX is also stirring the wheels in the opposite direction for Binance. Only time will tell if Binance overcomes or falls into the SEC trap.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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