CDS Crypto News Paradigm Criticizes SEC’s Legal Action Against Binance, Alleging Attempted Alteration of Laws without Due Process – Crypto News
Crypto News

Paradigm Criticizes SEC’s Legal Action Against Binance, Alleging Attempted Alteration of Laws without Due Process – Crypto News

Paradigm's Critique: SEC's Legal Approach and Its Potential Ramifications on Cryptocurrency Regulation

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Paradigm Criticizes SEC's Legal Action Against Binance, Alleging Attempted Alteration of Laws without Due Process - Crypto News

Paradigm Criticizes SEC’s Legal Action Against Binance, Alleging Attempted Alteration of Laws without Due Process – Crypto News

Crypto News – Paradigm, a venture capital firm, has raised concerns about the United States Securities and Exchange Commission (SEC) bypassing standard rulemaking procedures in its ongoing legal action against cryptocurrency exchange Binance.

In a statement released on Friday, September 29, Paradigm argued that the SEC is trying to reshape the law by leveraging the allegations in its complaint without adhering to established rulemaking processes. The firm firmly believes that this approach exceeds the SEC’s regulatory boundaries and strongly opposes such tactics.

The SEC initiated legal action against Binance in June, alleging multiple violations of securities laws, including operating without necessary registrations as an exchange, broker-dealer, or clearing agency. Paradigm pointed out that the SEC has been pursuing similar cases against various cryptocurrency exchanges, expressing concern that the SEC’s stance could significantly impact how we understand securities law in several critical aspects.

Paradigm Criticizes SEC's Legal Action Against Binance, Alleging Attempted Alteration of Laws without Due Process - Crypto News

Paradigm also highlighted apprehensions regarding the SEC’s application of the Howey test. The SEC frequently relies on the Howey test, stemming from a 1946 U.S. Supreme Court case involving citrus groves, to determine if transactions qualify as investment contracts and fall under securities regulations.

In an amicus brief, Paradigm argued that many assets are actively marketed, purchased, and traded based on their profit prospects. However, the SEC consistently exempts them from being classified as securities. The brief pointed to examples such as gold, silver, and fine art, emphasizing that merely having the potential for value appreciation does not inherently classify their sale as a security transaction.

Recently, USD Coin issuer Circle became involved in the legal dispute between Binance and the SEC. Circle contended that stablecoins should not be categorized as securities, emphasizing that individuals acquiring stablecoins are not doing so to derive profits.

Paradigm Criticizes SEC's Legal Action Against Binance, Alleging Attempted Alteration of Laws without Due Process - Crypto News
Sources:Cointelegraph

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