Binance Vs SEC: US DOJ Contradicts SEC’s Position That BUSD, Stablecoins Are Securities

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As a researcher with experience in the cryptocurrency industry, I find the latest development in the Binance vs. SEC lawsuit intriguing. The revelation that Binance Holdings and former CEO Changpeng Zhao have submitted key details from the United States v. Eisenberg lawsuit to challenge the U.S. Securities and Exchange Commission’s (SEC) position on stablecoins such as BUSD and USDC being securities could potentially shift the tides in their favor.

As an analyst, I’d rephrase it this way: In the recent turn of events in the ongoing lawsuit between Binance Holdings and the U.S. Securities and Exchange Commission (SEC), new information presented by Binance and its former CEO, Changpeng “CZ” Zhao, could potentially weaken the SEC’s stance on treating stablecoins like BUSD and USDC as securities.

Binance Leverages DOJ Lawsuit to Prove US SEC Wrong

In a recent court filing, Binance Holdings and Changpeng Zhao have presented additional evidence to support their argument against the SEC’s classification of stablecoins as securities. They have submitted this evidence jointly as part of their defense.

As a researcher studying the legal proceedings between Binance and the SEC in the United States v. Eisenberg case, I would like to emphasize our perspective on the classification of stablecoins, specifically Binance USD (BUSD), in this lawsuit. We intend to present the court with evidence supporting the US position regarding the nature of stablecoins as a means to bolster our argument against the SEC’s allegation that BUSD is an unregistered security.

In the high-profile $110 million Mango Markets scandal, the jury reached a verdict convicting Avraham Eisenberg of fraud and market manipulation. Notably, an exhibit from the US Department of Justice (DOJ) filing asserts that USDC, the stablecoin in question, does not fall under the category of securities because it fails to meet the requirements of the Howey test.

According to the Department of Justice’s filing, there isn’t enough evidence to label USDC as a security or even submit this issue to a jury. A fundamental characteristic of a security is that its holders anticipate earning profits through the actions of others.

US prosecutors have pointed out that the available evidence indicates that US Dollar Coin (USDC) holders do not necessarily anticipate earning profits. Moreover, there is no rational ground for instructing the jury to conclude that USDC should be considered as something other than a security based on whether or not its dollar peg remains intact.

Binance Vs SEC: Stablecoins Are Not Securities

According to Circle, the issuer of USDC, assets linked to the dollar like BUSD and USDC aren’t considered securities since users don’t anticipate earning profits from individual transactions. These payment stablecoins thus fall outside the SEC’s regulatory purview.

Additionally, a federal jury in New York found Avraham Eisenberg guilty of commodities fraud, manipulating commodity markets, and committing wire fraud. Contrary to the charges brought by the Securities and Exchange Commission (SEC) for securities law violations.

As a crypto investor, I can say that Binance’s stance on BUSD not being considered a security could potentially lead to a favorable outcome in the ongoing lawsuit. Such a ruling would bring much-needed clarity regarding the regulatory status of stablecoins, which is essential for the continued growth and development of the crypto industry. If this argument holds up in court, it will undoubtedly be a significant milestone in the evolution of digital asset regulations.

I’ve discovered that Binance, BinanceUS, and their CEO Changpeng “CZ” Zhao have successfully resolved all the discovery and deposition disagreements with the US Securities and Exchange Commission (SEC).

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2024-04-26 16:27