Key Points:
- Circle, issuer of USDC, joins the Binance vs. SEC lawsuit as amicus curiae.
- Circle contends stablecoins like USDC should not be considered securities.
- Paradigm, a crypto research firm, files an amicus brief against the SEC in the same lawsuit.
As the legal battle unfolds between the US Securities and Exchange Commission (SEC) and the prominent cryptocurrency exchange, Binance, a significant development has emerged in the lead-up to the scheduled October 12 hearing. Circle, the entity behind the stablecoin USD Coin (USDC), has been granted the authority to participate in the lawsuit as an amicus curiae, potentially offering a unique perspective on the case.
Understanding Circle’s Role as Amicus Curiae
In preparation for the upcoming hearing, District Judge Amy Berman Jackson of the US District Court for the District of Columbia has taken several crucial steps. Among these, she addressed various pending motions related to the SEC’s lawsuit against Binance.
One motion that garnered attention was the amicus brief submitted by Circle on September 29 amidst the ongoing legal showdown between the SEC and Binance. Circle’s argument strongly contends that assets tied to the US dollar, including USDC, should not be classified as securities. According to Circle’s perspective, individuals purchasing stablecoins like USDC are not primarily seeking profits but rather using them as a means of exchange. Circle further asserted that stablecoins lack the attributes that would categorize them as “investment contracts.”
After careful consideration, Judge Jackson accepted Circle’s role as amicus curiae, clarifying that their position would not favor either Binance or its CEO, Changpeng Zhao, in their efforts to dismiss the lawsuit. However, the court also emphasized that Circle, in their capacity as amicus curiae, would be allowed to participate in oral arguments only upon receiving explicit permission from the court.
For clarity, an amicus curiae, or “friend of the court,” is an individual or entity not directly involved in a lawsuit but possesses expertise or a vested interest in the lawsuit’s outcome. They offer information, expertise, or insights that bear on the issues in the case, assisting the court in its decision-making process.
Recent Developments in the SEC vs. Binance Lawsuit
In the ongoing lawsuit involving the SEC, Binance, its US affiliate Binance.US, and Binance’s global CEO, Changpeng Zhao, the crypto research firm Paradigm has also filed an amicus brief. Paradigm, which claims to have no financial interest in the defendants, has taken a stance against the SEC, accusing the commission of governmental overreach.
Paradigm argues that the SEC is attempting to circumvent the rule-making process to rewrite the law, relying on what they consider “disturbing allegations” in their lawsuit against Binance and the co-defendants.
Prior to these developments, Binance had already taken action against the SEC by filing a joint motion to dismiss the SEC’s lawsuit, including Bam Management Holdings Inc.
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