
- Binance has expressed concerns about stablecoin regulation in the U.S.
- The development follows the exchangeโs recent win in court against a regulator.
- The exchange faulted โinconsistent approachesโ to stablecoin oversight by different regulators.
The worldโs largest crypto exchange by trade volume, Binance, has raised concerns over what it termed โinconsistent approachesโ to stablecoin regulation in the U.S.
On July 2, the crypto exchange responded to a District of Columbia courtโs opinion discrediting several arguments of the Securities and Exchange Commissionโs (SEC) โmisguided crypto enforcement campaign.โ
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Binance pointed out multiple critical findings by the court, including the dismissal of the SECโs claim that the exchangeโs fiat-backed stablecoin, BUSD, is sold as an investment contract.
Binanceโs View on U.S. Stablecoin Regulation
According to the official blog post, the court established that BUSD was marketed as a stablecoin, with no facts suggesting that investors expected its value to appreciate due to Binanceโs efforts.
The court also found that the U.S. Department of Justice (DOJ) deemed another stablecoin โnot a security,โ contrary to the SECโs argument when pursuing other stablecoin issuers.
Based on these findings, the court underscored the need for a consistent approach to dealing with these assets, noting that it might be โmuch more difficultโ to pass the Howey Test in transactions involving stablecoins.
โIn our view, the fact that different U.S. agencies are taking inconsistent approaches to stablecoins creates deep market uncertainty and highlights a significant rule of law failure,โ Binance wrote. โThe court appropriately criticized the SECโs decision to litigate the billion-dollar industry through a โcase by case, coin by coin, court after courtโ approach.โ
Binance further highlighted another challenge remaining despite the ruling being a โsignificant victoryโ for the exchange and the broader crypto industry.
SECโs โBurden of Proofโ
While the court dismissed the SECโs arguments regarding the meaning of an investment contract and the alleged sale of BNB on secondary crypto exchanges constituted securities transactions, it allowed some of the regulatorโs claims to proceed.
This includes the SECโs argument that direct sales of BNB are securities transactions. Per Binance the court must assume this claim to be true at this stage of the proceedings, making it the SECโs onus to demonstrate that users acquired these tokens as investments rather than for other uses.
Read how Binance is cracking down on users selling their accounts:
Binance Users Are Selling Accounts, Exchange Is Cracking Down
Stay updated on Binanceโs fine in India:
Binance Faces $2.25M Fine for Violating Indiaโs AML Laws