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Backed by former commodity regulator Heath Tarbert, Circle, has intervened in the lawsuit filed by the Securities and Exchange Commission (SEC) against major crypto exchange Binance. Circle argued that financial trading laws should not extend to assets like stablecoins that are tied to other assets. According to Circle’s application, US dollar-backed assets cannot be securities because users do not expect profit from independent purchases.
This situation occurred at a time when Binance, one of the largest crypto exchanges worldwide, questioned the impact of US financial laws on cryptos. The SEC accused Binance of various legal violations for facilitating trading in cryptos like Solana’s SOL, Cardano’s ADA, and Binance’s BUSD.
According to Circle’s application, payment stablecoins are outside the SEC’s jurisdiction because they do not essentially have the characteristics of an investment contract.
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The SEC claimed that Binance sold BUSD as an investment contract and consequently accused them. However, Binance, last week, applied to dismiss the SEC lawsuit, asserting that the US regulator sought authority over digital assets. The former chairman of the Commodity Futures Trading Commission, Heath Tarbert, made Circle’s amicus curiae application, contributing to the increased complexity of the case.
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