United States District Judge Amy Berman Jackson, presiding over the District Court for the District of Columbia, has taken significant steps in the ongoing lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against cryptocurrency exchange Binance. The judge’s actions come on the eve of a pivotal hearing set for October 12, 2023.
Circle’s Amicus Curiae Status Granted
One of the most notable developments is the acceptance of an amicus brief submitted by Circle, the issuer of USD Coin (USDC), just ahead of the crucial hearing. Circle had initially filed a court motion on September 29 in response to the SEC‘s case against Binance, contending that USDC and similar stablecoins should not be classified as securities.
In its motion, Circle argued that buyers of stablecoins like USDC do not anticipate any profits from their acquisition. According to Circle, payment stablecoins do not inherently possess the attributes of an investment contract. Judge Jackson approved Circle as an amicus curiae, emphasizing that they will have the opportunity to participate in oral arguments only with the court’s permission.
Understanding Amicus Curiae
An amicus curiae is an individual or group not directly involved in the legal dispute but permitted to offer expertise and insights to assist the court. The court retains the discretion to decide whether to consider an amicus brief.
The SEC initially filed a lawsuit against Binance on June 5, encompassing 13 charges. Among these charges were allegations of unregistered securities sales involving Binance Coin (BNB) and Binance USD (BUSD) tokens. Additionally, the SEC asserted that Binance had operated as an illegal broker-dealer clearing service without proper registration in the United States.
Binance’s Attempt to Dismiss the SEC Lawsuit
On September 22, Binance, along with its CEO Changpeng Zhao, petitioned the court to dismiss the SEC lawsuit, asserting that the SEC had exceeded its jurisdiction. The legal representatives for Binance and Zhao argued that the SEC had not established clear industry norms prior to commencing legal action against the exchange, effectively overstepping its regulatory bounds.
As the legal battle unfolds, Circle’s involvement as an amicus curiae adds a significant dimension to the ongoing case between Binance and the SEC, with the October 12 hearing poised to be a pivotal moment in this high-stakes dispute.