#Circle has #supported #Binance in the matter of BUSD's status
Buyers of #stablecoins do not expect profit, so this asset category does not correspond to investment contracts. This statement was made by Circle's Chief Legal Officer and former #CFTC Chairman Heath Tarbert, according to CoinDesk.
The top executive commented on the SEC's claims against Binance regarding Binance USD (BUSD), which was issued by Paxos on behalf of the cryptocurrency exchange. On June 5, the Commission filed a lawsuit against the platform and its CEO, Changpeng Zhao. The agency has brought 13 charges, including the sale of unregistered securities, including BNB and BUSD.
Circle submitted a statement to the court, acting as an amicus curiae. The company stated that financial trading laws should not apply to stablecoins.
"Payment 'stablecoins' themselves do not possess significant characteristics of a security [within the SEC's jurisdiction]. Decades of precedent support the view that the sale of assets unrelated to any post-sale promises or seller commitments is insufficient to create an investment contract," the statement said.
In February, NYDFS initiated an investigation into Paxos. The regulator ordered the company to stop issuing BUSD. At that time, the firm also terminated its cooperation with Binance. The company ceased issuing new stablecoins in accordance with the regulator's instructions. Redemption and conversion operations are supported at least until February 2024.
In March, BUSD's market capitalization fell below $10 billion for the first time since June 2021. By June, the figure had dropped to $4.35 billion. As of the time of writing, the value has dropped to $2.26 billion, according to CoinGecko.
Both industry representatives and Federal Reserve Chairman Jerome Powell have previously spoken about the need for regulation of stablecoins.
Recall that Bernstein analysts predicted the capitalization of the stablecoin segment to grow from the current $125 billion to $2.8 trillion over the next five years. $BUSD