Buyers of stablecoins do not expect profit, so this category of assets does not correspond to investment contracts. This statement was made by Circle’s general counsel and former head CFTC Heath Tarbert, writes CoinDesk.
The top manager commented on the claims SEC to Binance regarding Binance USD (BUSD), which was issued by Paxos on behalf of the crypto exchange. On June 5, the Commission filed a lawsuit against the platform and its CEO Changpeng Zhao. The department brought 13 charges, including the sale of unregistered securities, including BNB and BUSD.
Circle filed an application with the court, acting as amicus curiae. The company said that financial trading laws should not apply to stablecoins.
“Payment „stable coins” do not themselves have the essential characteristics of a security [юрисдикции SEC]. Decades of case law support the view that a sale of assets unrelated to any post-sale promises or obligations by the seller is not sufficient to create an investment contract.” – the statement says.
In February NYDFS initiated an investigation into Paxos. The regulator ordered the company to stop producing BUSD. At the same time, the company stopped cooperation with Binance.
The company has stopped issuing new stablecoins in accordance with the regulator’s instructions. Redemption and conversion operations are supported until at least February 2024.
In March, BUSD’s capitalization fell below $10 billion for the first time since the end of June 2021. In June, the figure fell to $4.35 billion. At the time of writing, the value has dropped to $2.26 billion, according to CoinGecko.
The need to regulate “stable coins” was previously stated by both industry representatives and Fed Chairman Jerome Powell.
In June, the Financial Services Committee of the US House of Representatives presented the third version of the profile bill on stablecoins.
Let us recall that Bernstein analysts predicted an increase in the capitalization of the “stable coin” segment from the current $125 billion to $2.8 trillion within five years.
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