Crypto USDC on a tightrope in the face of Binance turmoil

While Binance finds itself in the crosshairs of the SEC, another crypto, USDC, finds itself caught in this storm. But what is really going on and why does Circle care?

USDC and the crypto-classification debate

The SEC has always been vigilant regarding crypto regulation, and Binance is currently in its sights. This move caused a stir in the industry, prompting Circle to intervene. The reason ? USDC, a stablecoin backed by Circle, is directly threatened by this regulation.

The crypto company Circle thus raised a key argument : Stablecoins, like USDC, should not be considered securities.

According to them, these tokens do not have the distinct characteristics of investment contracts. To support their point of view, they cite decades of jurisprudencesuggesting that a simple sale of assets without post-sale obligations does not create an investment contract.

Stablecoins: A regulatory issue

In February, Jeremy Allaire, CEO of Circle, expressed a clear opinion on how assets, like crypto USDC, should be regulated.

Rather than reporting to the SEC, he believes they should be under the jurisdiction of banking regulators. This position was in response to a previous SEC action against Paxos, related to the stablecoin BUSD.

The debate over stablecoins does not end there. The SEC, in June, took a bold step by suing Binance and its CEO, Changpeng Zhao. The commission classified a dizzying amount of $115 billion in assetsn crypto, including BUSD, like securities, arguing that their nature promised future profits, making them investment contracts.

The battle between Binance and the SEC promises to be a turning point for the crypto sector. Circle, with its stablecoin USDC, is caught in the middle, struggling to establish a clear position in this regulatory fray. As the turmoil continues, one question remains: how will this case influence the future of crypto as a whole? In the meantime, Saudi Arabia is abandoning the dollar in favor of crypto.