Recently, it has been reported that the American Securities Trading Association (SEC) plans to take enforcement action against Paxos to crack down on the Binance dollar (BUN), which makes many people in society doubt how regulators regard a stable dollar as a security.

Blockchain technologists told the Cointelegraph that although the answer is not either or, then if the stable currency issue is based on profit expectations, or derivatives of securities, then there is a reason to do so.

According to a report in the Wall Street Journal on February 12th, SEC is planning to sue Paxos Trust Company for the sale of Binance U.S.A., a stable currency established by SEC in partnership with Binance in 2019. It is reported that the US Securities and Exchange Commission declared in a notice that the US dollar against the US dollar is an unregistered security.

Dr. Aaron Lane, a senior teacher at the RMIT blockchain Industrial Innovation Center, told Cointelegraph that although SEC may claim the relatively stable stock securities, the question has not been finally tested by a US court:

There is no doubt that a particularly controversial problem with stable currencies is whether the investment in stable currencies will lead to a profit forecast (Howie tests the 'third arm').

"from a narrow point of view, the overall core concept of stability is stability. From a more comprehensive point of view, being able to fabricate lies provides a profit estimate against arbitrage, hedging and betting opportunities.

Ryan also explained that under US securities law, stable property may be subject to US securities law if it is found to be a derivative of securities.

Gamo Gensler, the current chairman of SEC, made this clear in his speech to the American Law Association's Derivatives and Futures Trading Law Committee in July 2021:

"make no mistake: it doesn't matter whether it's a stock token, a smooth use value token encouraged by securities, or any other open-ended virtual commodity generated by underbid securities."

"such platforms-whether in decentralized or dense financial industries-are involved in securities methods and must operate under everyone's securities system," he said at the time. "

However, Lane noted that in the end, each case "will also be based on its own objective facts", especially when it is determined that the algorithm is stable rather than login passwords or fixed loan guarantees.

Quinn Emanuel's trial counselor recently published a post on this situation, explaining that in order to "increase" a relatively stable loan currency to a "relatively stable use value", it is sometimes possible to give discounts before they are sufficient and stable.

"this kind of market sales is likely to apply the view that the initial consumers, although both foreign investors and consumers have issued formal exemption agreements, have made steady progress when the cost is high, and their intention is to resell," it wrote.

However, while smooth bond issuers are likely to resort to the court to decide the dispute, many believe that SEC's "application for enforcement control" approach is unnecessary.

Michael Mainer, Piper Alderman's digital currency mentor and partner, told Cointelegraph,SEC that participants in areas looking for compliance should be given "scientific and specific guidance":

"imposing controls is an inefficient way to facilitate the existing policy process, as SEC Operations Commissioner Pierce has often seen in his recent fierce questions about Kraken litigation. When a growing area is not in line with the current strict regulatory framework and has been looking for a clear form of compliance management, access and scientific and sound specific guidance is much better than resorting to prosecution.

Cinneamhain Ventures partner Glover Cochrane made another point of view to his 181000 fans on Twitter on Feb. 13, stressing that SEC could sue all companies that sell assets under the broader Securities Act of 1933:

The digital currency investor went on to explain that the SEC does not stick to the Howie test:

"this property owns underpriced US bonds, which makes it very much like a currency fund, giving holders access to a security, even if they do not profit from it. Put forward an argument (not an argument I agree with, but it is also a sufficient scientific and reasonable argument) that they can be used as a loan guarantee.

It is well worth fighting for, but everyone who is dismissive of it needs to re-evaluate it because they feel that the American Securities and Exchange Association has made a mistake and that it cannot pass the Howie test. Believe it or not, the SEC has well-informed securities lawyers and advisers.

The latest news of SEC's planned action was reported on Feb. 10 that Paxos Trust was conducting a survey and analysis of the New York City Financial Services Center (New York Department Of Financial Services), which was not confirmed.

A spokesman for Binance commented on the initial report that Binance was a "commodity sold and owned by Paxos" and that Binance licensed its trademark to the company and BU.S. Use it together. It added that the Paxos was heavily regulated by the New York City Financial Services Centre (NYDFS) and that the pound against the dollar was a "steady currency encouraged by 1 to 1".

"stable currency is the key to finding emergency protection in volatile markets, and limiting its application will directly harm tens of millions of people around the world," the spokesman added. "We will continue to check the situation. Our own customers around the world have a lot of stable coins they can use. "