In a significant move, U.S. District Judge Amy Berman Jackson has taken proactive steps to address the pending motions in the high-profile lawsuit between the U.S. Securities and Exchange Commission (SEC) and the renowned cryptocurrency exchange, Binance. This comes as both parties gear up for an imminent, crucial hearing.
One of the standout decisions by Judge Jackson was the green light given to an amicus brief from Circle, the issuer of the USD Coin (USDC). This intervention by Circle, just ahead of the pivotal hearing scheduled for October 12, brings to the fore the debate surrounding the classification of assets pegged to the U.S. dollar. Circle’s stance is clear: assets like USDC should not be deemed securities. They further argue that individuals investing in such stablecoins are not in it for potential profits. In their view, these stablecoins don’t possess the attributes commonly linked to investment contracts.
In a noteworthy move, Judge Jackson acknowledged Circle’s contribution as an amicus curiae, clarifying that Circle isn’t aligning with either Binance or its CEO, Changpeng Zhao, in their bid to quash the lawsuit. The court also underscored that participation of an amicus curiae in oral debates is contingent upon the court’s consent.
For those unfamiliar, an amicus curiae, often referred to as a “friend of the court,” is an entity or individual not directly embroiled in the legal dispute but is allowed to furnish the court with pertinent insights or expertise on the matter. The prerogative to entertain an amicus brief lies solely with the court.
In related developments, the SEC faced a hiccup in its endeavor to gain access to Binance.US’s software. The regulatory body, on June 5, slapped Binance with a lawsuit encompassing 13 charges. These ranged from unauthorized securities sales, notably of BNB and Binance USD (BUSD) tokens, to allegations of Binance’s failure to register as a broker-dealer clearing agency, thereby operating illegally on American soil.
In a countermove on September 22, Binance, along with its CEO, petitioned the court to dismiss the SEC’s allegations, contending an overreach by the regulatory body. Binance’s legal team posited that the SEC had not delineated clear industry norms before initiating legal proceedings against the exchange, thereby overstepping its jurisdictional boundaries.
This evolving legal saga underscores the complexities and challenges in the rapidly growing crypto domain, with regulatory clarity being the need of the hour.