SEC ends probe into Paxos, no actions on BUSD stablecoin News ▸ US ▸ Binance ▸ Regulation
SEC ends probe into Paxos, no actions on BUSD stablecoin
Paxos predicts that the end of the SEC's investigations will "unlock a new wave of stablecoin adoption."
2 min read
Updated: Jul. 11, 2024 at 5:07 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The US Securities and Exchange Commission (SEC) has ended its investigation into stablecoin issuer Paxos.
On July 11, Paxos announced that it received an investigations termination notice from the SEC a few days earlier on July 9. The notice confirmed that the regulator would not pursue enforcement action against Paxos Trust Company regarding the Binance USD (BUSD) stablecoin.
This development comes over a year after the SEC issued a Wells notice suggesting a potential enforcement action against the stablecoin issuer over its role in the dollar-backed BUSD stablecoin. Notably, it also follows a recent federal judge’s ruling that BUSD sales did not contravene securities law, as the financial regulator claimed.
While BUSD’s supply has all but evaporated, Paxos had publicly maintained that the stablecoin was not a security and promised to fight the SEC claims.
Following the completion of the SEC’s investigations, the firm reiterated this claim, stating:
“Paxos Trust Company has always maintained that its USD-backed stablecoins are not securities under federal securities laws and that the Wells Notice was unwarranted and unjustified.”
Paxos has issued several regulated digital assets, including PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG). The company holds licenses from various financial regulators, including the NYDFS in the US, the MAS in Singapore, and the FSRA in the Abu Dhabi Global Market.
‘New wave of adoption’
Paxos predicts that the conclusion of the SEC’s investigation into the BUSD stablecoin will spur a new wave of stablecoin adoption by major global enterprises.
It stated:
“Well-designed stablecoins with strong consumer protections – like those issued by Paxos – will transform the financial system in payments, settlement and remittance use cases. This transformative technology will make the financial system more stable, accessible and transparent.”
Stablecoins have proven to be one of the most effective real-world applications of crypto technology, particularly in emerging markets such as Nigeria. The assets are usually pegged to the US dollar and provide a stable alternative to volatile crypto like Bitcoin.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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BUSD is a stablecoin issued by Paxos in partnership with Binance..
PayPal USD
$0.99986
PayPal USD is backed entirely by short-term US Treasuries, U.S.
Paxos
Paxos Trust Company, LLC is a regulated blockchain infrastructure company building transparent and transformative financial solutions.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.