The U.S. government’s arguments on stablecoins in an unrelated criminal case could bolster Binance’s position in its civil case with the SEC.
Cryptocurrency exchange Binance and former CEO Changpeng “CZ” Zhao have filed notice with the court in its case with the United States Securities and Exchange Commission (SEC) to establish the government’s position on stablecoins as a security.
In an April 25 filing in U.S. District Court for the District of Columbia, lawyers for Binance and CZ filed a Notice of Supplemental Authority, bringing the court’s attention to the U.S. government’s arguments in its criminal case against Mango Markets exploiter Avraham Eisenberg. In that case, prosecutors argued there was “no factual basis” for treating USD Coin (USDC) as a security or putting the question to a jury.
The Justice Department used the argument against USDC as a security in its case against Eisenberg, who was found guilty of fraud and market manipulation on April 18. Having the government claim that a stablecoin was not a security seemingly under the SEC’s regulatory reach could bolster Binance’s arguments in the civil case.
