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Authored by Anthony Tu-Sekine from US law firm Seward & Kissel LLP.
On June 5th and 6th, 2023 the SEC filed complaints against Binance (1) and Coinbase (2), respectively, for acting as an exchange, broker, and a clearing agency without registering accordingly as a result of offering tokens and staking products that the SEC alleges are securities. In addition to the SEC's actions, ten states have filed their own actions against Coinbase amounting to cease and desist orders with regard to Coinbase's staking program. This client alert summarizes the actions by the SEC and state regulators and includes answers and recommendations based on client inquiries we have received.
The Binance complaint includes a stablecoin
In a departure from previous approaches in similar types of actions, each of the suits lists a number of tokens listed on, and the staking programs offered by, the exchanges (3) that the SEC alleges are securities under U.S. laws. In Binance's case, one of the tokens included in the suit is BUSD, a stablecoin issued by Binance. While stablecoins can be structured in a way that they are not deemed to be securities in the U.S., the facts alleged by the SEC with respect to BUSD would support a conclusion that BUSD as offered could be deemed a security. Of interest, ETH, the native token of the Ethereum...................... To view our full article Click here
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