Crypto regulation is causing concern among stablecoin issuers, especially those based in the United States. The SEC’s recent actions against Paxos’ BUSD have led to rumors that Circle could be next on the list. However, the company has refuted these allegations, defending the nature of its USDC stablecoin and stating that it is not a security.
Circle comes out of the closet
Recently, social media in the crypto sphere has been flooded with rumors that the SEC has issued a Wells Notice to Circle, a USDC issuer. This would have jeopardized the company’s position by foreshadowing legal action by the US financial regulatory agency. On February 14, Fox Business reporter Eleanor Terret had stated in a tweet, currently deleted, that the SEC had ordered Circle to stop issuing USDC, claiming that the stablecoin was an unregistered security.
This comes as the crypto ecosystem is on edge following the SEC’s crusade against US-based cryptocurrency companies. As we reported two days ago, Paxos, the issuer of the Binance stablecoin (BUSD), has been sued by the SEC, forcing the company to permanently cease issuing BUSD.
SEC steps up crackdown on stablecoins
The U.S. Securities and Exchange Commission (SEC) continues its fight against stablecoins, causing panic in the market. The crackdown on Paxos, for example, has forced thousands of investors to rush to exchange their BUSD for other stablecoins, causing widespread panic. As a result, the market capitalization of the BUSD melted by $1.3 billion in no time.
Today, all eyes are on stablecoins, wondering who will be next on the SEC’s blacklist. Circle’s USDC? Or maybe Tether (USDT)? Um, unlikely as USDT is based in Hong Kong, immune to SEC jurisdiction.
The SEC’s war on cryptos knows no bounds: after bending Paxos and Binance, the SEC now claims that staking services and stablecoins constitute financial securities. In any case, Kraken has paid the price, receiving a colossal fine of $30 million.
So far, the SEC has not issued any official statements regarding stablecoins in general. However, it would be wise for regulators to look at each stablecoin on a case-by-case basis, rather than making a blanket statement on this issue.
Stablecoin issuers reject this classification outright. On the other hand, advocates argue that these cryptocurrencies represent a credible alternative to traditional currencies and cannot be considered financial securities. There is no doubt that the continuation of this saga may hold many surprises, unless the SEC decides to temper its ardor …
CEO and Editor-in-Chief of Coinpri I have been navigating the waters of Blockchain for 5 years already.
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