Venture capital firm Paradigm criticized the Securities and Exchange Commission (SEC) in a statement released on Friday. Paradigm accused the US Securities and Exchange Commission of skipping standard rule-making procedures in the case against cryptocurrency exchange Binance.
The US Securities and Exchange Commission (SEC) has filed lawsuits against cryptocurrency exchange Binance, Binance CEO Changpeng Zhao, and cryptocurrency exchange Coinbase in quick succession in June. These consecutive lawsuits by the SEC have increased tension between the crypto industry and US regulators.
The SEC has faced criticism from many figures in the crypto industry due to its recent actions. Ripple CEO Brad Garlinghouse, in particular, has heavily criticized SEC Chairman Gensler during this process.
Furthermore, an important development occurred in the SEC-Binance case recently. Circle intervened as a third party in the Binance case. Circle argued that stablecoins, which are cryptocurrencies pegged to fiat currencies such as the US Dollar or Euro, are not securities.
The US Securities and Exchange Commission, which is currently the center of criticism, received another criticism. Venture capital firm Paradigm accused the US Securities and Exchange Commission of skipping standard rule-making procedures in the case against cryptocurrency exchange Binance in a statement released on September 29th.
Paradigm also expressed concerns about the deficiencies in the application of the Howey test by the SEC. Accusing the SEC of skipping standard rule-making procedures, Paradigm argued that an asset cannot be classified as a security solely based on its appreciation in value.
While the SEC has become the target of criticism with the consecutive lawsuits, both Binance and Coinbase exchanges have also suffered a major blow during this process. Binance’s market share and trading volumes have experienced significant declines in recent months. Additionally, Binance’s numerous license applications in various European countries have been rejected.