This case largely follows the SEC vs Coinbase proceedings. The key element in both cases is what and on what basis can be considered a security in the cryptocurrency world.
More than four hours of arguments and discussions have taken place. The acknowledgment of the SEC’s authority in this field and assertions that the token is not a security are recurrent themes. Doubts regarding staking and the refusal to make an expedited decision are also mirrored.
One significant difference is that Coinbase is likely to agree to recognize certain projects as securities in exchange for maintaining its licenses and the cancellation of fines, with a commitment to obtaining a license in the future.
In contrast, Binance faces fines for operating with U.S. investors without a license.
One aspect that caught my attention is the court’s opinion that the BUSD stablecoin is not a security. This seems logical, as a stablecoin, by nature, does not fall under the Howey Test definitions. However, there is a decision on the USTC stablecoin, recognized as a security.
What’s the difference?
It’s straightforward and logical: BUSD is backed by the dollar, while USTC is essentially backed by the Luna token. Luna has been recognized as a security, and consequently, all assets backed by a security also acquire security status.
Furthermore, stablecoins backed by fiat are not considered securities. This implies that the risk of USDT being recognized as a security is also absent. A simple concept that was not entirely clear to everyone last summer has now been definitively clarified.