Venture capital firm Paradigm has criticized the United States Securities and Exchange Commission (SEC) for bypassing the standard rulemaking procedures in its current legal action against the cryptocurrency exchange Binance.
In a statement released on Friday, Sept. 29, Paradigm stated the SEC is attempting to use the allegations in its complaint to alter the law without adhering to the established rulemaking process. Paradigm firmly believes that the SEC is exceeding its regulatory boundaries and further stated that it strongly opposes this tactic.
In June, the SEC initiated legal action against Binance, accusing it of multiple violations of securities laws, such as operating without the necessary registration as an exchange, broker-dealer or clearing agency. Paradigm also underscored that the SEC has been pursuing similar cases against various cryptocurrency exchanges lately and voiced apprehension that the SEC’s stance “could fundamentally reshape our comprehension of securities law in several critical aspects.“
Additionally, Paradigm highlighted concerns regarding the shortcomings of the SEC’s application of the Howey test. The SEC often relies on the Howey test — originating from a 1946 U.S. Supreme Court case involving citrus groves — to determine whether transactions meet the criteria for investment contracts and fall under securities regulations.
In its amicus brief, Paradigm asserted that many assets are actively marketed, purchased and traded based on their profit prospects. Nevertheless, the SEC has consistently exempted them from being classified as securities. The brief further pointed out instances such as gold, silver and fine art, underscoring that merely having the potential for value appreciation does not inherently classify their sale as a security transaction.
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The Royal Navy will get 25 new warships – and could get three more – as the government indicates where its planned rise in defence spending will go.
Defence Secretary Grant Shapps told Sky News there are 28 new ships and submarines in the design or construction stage at the moment for the UK’s armed forces.
He said 22 ships are “already in the system” – but there is less clarity over six new warships he announced for the Royal Marines today.
The defence secretary said that the government is committing to three of the new “versatile” ships for the Marines, “and then possibly another three as well”. He later said the final three are “in the design phase”.
He also announced two of the ships being built – type 26 and 31 frigates – will be equipped with land-attack missiles so they will be capable of attacking targets on shore.
Mr Shapps said this is a “very, very large shipbuilding programme, a lot of warships, the golden era of shipbuilding here”.
He added: “It’s all possible because just last month we agreed as a government to spend 2.5% of our GDP on our defence sector because we think it’s very, very important to make sure that those who would seek to do us harm are put off, that they are dissuaded because they can see that we’re serious about our defence.”
But defence spending fell in the early years of the Conservative government, which has been in power for 14 years, and spending was not boosted when Ukraine was invaded in 2014 or 2022.
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Mr Shapps said the Tory pledge is different to Labour’s because the Conservatives have “set out a timeline”.
“We’ve also said how we would go about largely funding this, and that’s by reducing the size of the civil service, which is much bigger than it was before COVID,” he said.
“We want to get it back down to the size it was before and use that money to spend on defence.
“I have to say, as defence secretary, with everything that I know in this role, that I think that the Labour position presents a danger to this country because it will send a signal to our adversaries that we’re not serious about our defence if we won’t set out that timetable.”
Labour’s shadow work and pensions minister Alison McGovern said she is “sceptical” about the Conservatives’ claim about how they will fund the spending rise.
She said Labour has had to pledge the rise for when the economy allows “because of what the Conservative Party have done to our economy” – as she accused Liz Truss and Rishi Sunak of implementing “big unfunded tax cuts”.
Ms McGovern added: “I think everybody would expect Rachel Reeves as the shadow chancellor to say, well, we will make our plans when we’ve got access to all of the books, all of the details of Ministry of Defence spending.”
Mr Shapps said the government did not spend as much on defence previously because countries such as China, North Korea, Iran and Russia were not such a threat.
The defence secretary added: “We were living in very, very different times.”
He said the government has also added £24bn to the defence budget over the past couple of years and the UK is “by a country mile the largest spender on defence in Europe, with the second largest in NATO after only the US”.
Discussing the UK’s current fleet, Mr Shapps said sister ships HMS Albion and HMS Bulwark are due to come out of service in 2033-2034 but the defence secretary said they will not be scrapped before that.
Albion and Bulwark are currently used as the Royal Navy’s landing platform docks to transport the Royal Marines.
Mr Shapps also announced HMS Argyll and HMS Westminster, two frigates with a combined service of 63 years, are to be retired, with HMS Argyll sold to BAE Systems to be used to support apprentice shipbuilder training.
The new ships being built include Type 26 and Type 31 frigates in Scotland, Astute and Dreadnought submarines in Barrow-in-Furness, and Fleet Solid Support ships in Belfast and Devon.