Stablecoin issuer Circle argued that tokens pegged to the price of a sovereign currency, such as the U.S. dollar, are not securities, according to a court document filed Thursday.

Weighing in on the Securities and Exchange Commission’s (SEC) lawsuit against Binance, Circle outlined its stance on stablecoins—without taking either party’s side—in an amicus brief filed in district court in Washington, D.C.

Known primarily as the issuer of USD Coin (USDC), Circle is behind crypto’s second-largest stablecoin by market cap that’s worth around $26 billion, according to CoinGecko. And the SEC’s lawsuit against Binance could have ramifications for stablecoins as a whole, Circle said.

The SEC sued Binance in June. It accused the exchange and CEO Changpeng Zhao of operating illegally in the U.S. while misusing customer funds. The holding company for Binance’s U.S.-based affiliate, BAM Management, was also wrapped up in the enforcement action.

Alleging Binance offered investors unregistered securities, America’s financial watchdog highlighted Binance USD (BUSD)—a Binance-branded stablecoin formerly issued by New York firm Paxos—as an example. The token was one of several offerings the SEC took issue with, including Binance’s exchange token, Binance Coin (BNB).

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Author: André Beganski

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