Stablecoin issuers argue that financial transaction regulations should not apply to stablecoins pegged to other assets.

Stablecoin issuer Circle has filed an amicus brief in Binance’s case against the U.S. Securities and Exchange Commission (SEC), according to a court filing on September 28.

In legal terms, an amicus curiae (Latin for "friend of the court") is a person or group who is not directly involved in a case but has a significant stake in the proceedings. These parties can exert influence by submitting written arguments, called "friend of the court briefs," to present their views to the court.

Circle’s interest in the matter comes as the SEC has classified Binance-backed BUSD stablecoin as a security. While Binance has vehemently rejected this classification, Circle further asserts that financial transaction regulations should not apply to stablecoins pegged to other assets such as the U.S. dollar.

Furthermore, USDC issuers argue that BUSD cannot be considered a security because its users do not expect to profit from their purchases.

This view is consistent with that of venture capital firm Paradigm, as expressed in its amicus brief in the Terra-SEC case, in which Paradigm strongly opposed the SEC’s classification of stablecoins as securities and warned that such a regulatory stance could have adverse consequences for stablecoins and the broader field of digital asset innovation.

Nonprofit groups file amicus brief in support of Binance

Meanwhile, the nonprofit Investor Choice Advocates Network (ICAN) also filed an amicus brief in support of Binance on September 28.

ICAN said its interest in the case is to ensure that the SEC’s power to regulate securities does not unduly hinder the ability of individuals and organizations that choose to trade in digital assets.

The organization added:

“The SEC’s vague and broad interpretation and application of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) to digital assets will have a profound negative impact on investor opportunities.”

As a result, ICAN hopes that the court will agree with Binance’s request to dismiss the SEC’s lawsuit against it, saying that the regulator’s litigation efforts are aimed at expanding its jurisdiction over the emerging industry. #Circle  #SEC