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Binance.US has received backing from a prominent crypto advocacy organization in its efforts to counter an ongoing lawsuit from the U.S. Securities and Exchange Commission (SEC).
In a recent amicus brief, the US Chamber of Digital Commerce contended that the agency’s allegations against the exchange are unfounded and that its actions are driving crypto enterprises away from the country.
Regulation By Enforcement
In the filing submitted on Thursday, the lobbyists reiterated earlier criticisms from industry figures that the SEC is fostering an unwelcoming atmosphere for crypto businesses through “regulation by enforcement.”
“The trillion-dollar blockchain economy—is noticeably steering clear of the United States, perceiving the regulatory landscape as too opaque and too antagonistic for conducting business here,” the advocacy group stated.
The SEC has already initiated enforcement actions against numerous significant crypto companies, which, as of this year, include major players such as Kraken, Coinbase, and Binance.
Many pro-crypto politicians and industry leaders have asserted that the crypto sector would exit the U.S. if the agency persists in this direction. For instance, crypto lender Nexo ceased its Earn program in the U.S. earlier this year after settling a $45 million penalty with the SEC.
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Unregistered Securities
The agency’s allegations typically concentrate on firms that are purportedly issuing or listing unregistered securities products, which may encompass stablecoins, blockchain staking services, and the crypto assets themselves.
In the instance of Binance, the SEC claimed on June 5 that the exchange provided over a dozen securities for trading, including BNB, BUSD, SOL, ADA, MATIC, and others. However, industry leaders like Coinbase have argued that there are no clear guidelines regarding how crypto relates to securities law, and that the SEC is exceeding its jurisdiction in the crypto space.
The Chamber of Digital Commerce expressed a similar perspective in its filing. It stated:
“The essence of the SEC’s Complaint merges the long-established distinction between the subject of an investment-contract security, which could be nearly any type of asset, and the ‘investment contract’ itself, which may be a security subject to U.S. law and regulation.”
The lobbyist group compared the SEC’s error to accusing a grocery store of breaching securities law by selling produce, such as oranges.
Ripple presented a comparable argument in its case against the SEC after the agency asserted that the token Ripple had issued – XRP – was a security. Earlier this year, a court ruled in favor of Ripple, and the SEC has since dropped all associated charges against the company.
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