U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has called on financial regulators to turn over the push for stablecoin regulation to the U.S. Congress.
February 22 TweetPierce noted that Congress was “actively considering the issue,” adding that the SEC and other financial regulators could hold public roundtables pending results from legislators. .
Stablecoins have come under increased scrutiny from regulators around the world after Terra’s UST demise in 2022. Regulators have pointed out how this asset class will affect the broader financial economy.
SEC targeting stablecoins
Financial regulators issued a Wells Notice to stablecoin issuer Paxos on February 13 stating that the Binance USD (BUSD) stablecoin is an unregistered security.
Another stablecoin issuer, Circle, has denied rumors that financial regulators have issued a well notice for its stablecoin, USD Coin (USDC).
Additionally, the SEC has labeled Terra’s algorithmic stablecoin UST Security in a lawsuit against Terraform Labs and its founder Do Kwon.
wall street journal report On February 22, financial regulators announced they were investigating whether stablecoins were products issued in violation of investor protection laws.
Crypto Lawyers React
Delphi Labs General Counsel Gabriel Shapiro Said The SEC can argue that stablecoins are securities because:
“Integrations, promotions, marketing, commerce, etc. that build the stablecoin ecosystem are ‘reasonably expected’ and ‘efforts of others’ and may lead to benefits associated with stablecoins. “
“Stable[coins] It may even pass the Howey test (except for other types of security tests such as Reves) despite being “stable”. ”
Another Attorney Mike Selig Said The SEC, which rated Terra’s algorithmic stablecoin UST for security, shows that “almost anything can be security.”
On the other hand, cryptocurrency exchange Coinbase emphasizes said “Stablecoins are not securities”
Over the past year, the US SEC has increased regulatory scrutiny of the cryptocurrency industry following the capitulation of several cryptocurrency companies and fraudulent activity in the industry.