Binance.US has garnered support from a major crypto lobbyist group in warding off an ongoing lawsuit from the U.S. Securities and Exchange Commission (SEC).
In a new amicus brief, the US Chamber of Digital Commerce argued that the agency’s claims against the exchange are misplaced, and that its actions are turning crypto businesses away from its borders.
Regulation By Enforcement
In the Thursday filing, the lobbyists echoed previous criticisms from industry leaders that the SEC is creating a hostile environment for crypto businesses through “regulation by enforcement.”
“The trillion-dollar blockchain economy—is conspicuously avoiding the United States, finding the regulatory environment too opaque and too hostile to conduct business here,” the advocacy group wrote.
The SEC has already launched enforcement actions against dozens of major crypto firms which, as of this year, include industry giants like Kraken, Coinbase, and Binance.
Numerous pro-crypto politicians and industry leaders alike have claimed that crypto would flee the U.S. if the agency continued down this path. Crypto lender Nexo, for example, closed down its Earn program in the U.S. earlier this year after paying a $45 million fine to the SEC.
Unregistered Securities
The agency’s complaints usually focus on such firms issuing or listing supposedly unregistered securities products, which may include stablecoins, blockchain staking services, and crypto assets themselves.
In the case of Binance, the SEC alleged on June 5 that the exchange offered over a dozen securities for trade, including BNB, BUSD, SOL, ADA, MATIC, and others. Industry leaders like Coinbase, however, have argued that there exist no clear rules on how crypto interacts with securities law, and that the SEC is overstepping its authority in crypto.
The Chamber of Digital Commerce reflected the same view in its filing. It wrote:
“The gravamen of the SEC’s Complaint collapses the long-recognized distinction between the subject of an investment-contract security, which could be virtually any type of asset, and the “investment contract” itself, which may be a security subject to U.S. law and regulation.”
The lobbyist group likened the SEC’s mistake to accusing a grocery store of violating securities law by selling fruit, like oranges.
Ripple made a similar argument in its case against the SEC after the agency claimed the token Ripple had issued – XRP – was a security. Earlier this year, a court ruled against the agency, and the SEC has now dropped all related charges against Ripple.
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