SEC v. Binance - Amicus Brief by ICAN

October 18, 2023

Kirk & Ingram is proud to announce its first public filing in the form of an Amicus Brief on behalf of the Investor Choice Advocates Network, or ICAN.  ICAN is a nonprofit dedicated to pushing back against overreach by the SEC.  The brief supports Binance in defending the enforcement action brought against it by the SEC on several issues.

In the brief, we argue that the SEC's expansive approach to regulating digital assets as securities risks reducing investment opportunities available to U.S. investors, and it breaks down into three primary arguments:

Extraterritoriality:  If transactions are deemed domestic merely because U.S. residents participate, this would run afoul of Morrison and foreign platforms may exclude Americans entirely.  This risks hampering progress in democratizing access to global markets.

Inherent Design Features of Digital Assets:  We also contend the SEC improperly uses inherent design features of cryptocurrencies to justify their finding that the digital assets alleged in the complaint constitute securities.  Just because an asset has a diminishing supply or can generate yield does not make it a security.  Those are inherent characteristics, not the efforts of others as required by Howey.  Finding otherwise would turn many commodities into securities, and risks stifling creating innovative digital products.

Speech:  Additionally, we argue creators' statements cannot create investment contracts absent contractual promises.  Chilling this commercial speech risks deprives the public of useful information about assets.

To read the whole brief, you can find it here.  Big thanks to Nick Morgan at ICAN, Chris Davis of Gray Reed, John Farnum at Miles & Stockbridge for their assistance.

Stay tuned as we announce more details about our firm and future filings!

-K&I