Paxos to Face Charges by SEC, Here's Why
The SEC alleges that Paxos has violated federal securities laws by offering and selling the BUSD without registering the offering with the SEC
The SEC's action against Paxos is part of its ongoing effort to ensure that digital asset offerings comply with federal securities laws
The SEC's action sends a strong message to the industry that it will not tolerate violations of the law and that those who fail to comply will be held accountable
The Securities and Exchange Commission has elected
To take legal action against Paxos for releasing the Binance USD Coin.
Recently, prominent cryptocurrency companies have been subject to intense scrutiny by government officials around the world. Stablecoin issuer Paxos is currently under investigation by regulators in New York, and the Securities and Exchange Commission (SEC) is reportedly planning to take legal action against the firm for the issuance of Binance USD coin (BUSD).
The Wall Street Journal recently reported that the SEC had sent a letter to Paxos, notifying them of a potential enforcement action. This news has caused a stir in the cryptocurrency industry, as many are now wondering what the consequences of this investigation will be.
The U.S. Securities and Exchange Commission (SEC) is alleging that BUSD is unregistered security, and is taking legal action against the firm for violating investor protection laws. Paxos and Binance jointly launched the stablecoin back in 2019, with Paxos issuing and owning BUSD, and Binance only licensing the brand. Binance has stated that they are “monitoring the situation”, but it is unclear if the SEC is suing the firm for issuing the stablecoin or just listing it. If it is the latter, many cryptocurrency exchanges could be in trouble for listing BUSD.
Adding to the confusion, the New York Department of Financial Services (NYDFS) launched an investigation against Paxos last week, although the details of the investigation remain unclear. It should be noted that Paxos is a Trust Company chartered by the NYDFS.
The SEC’s move has been met with criticism from the cryptocurrency community, with many noting that the SEC is attempting to target Binance. This has raised questions about the future of BUSD, and the potential implications for other cryptocurrency exchanges.
Here’s how Binance USD is responding to the latest news.
Binance USD is currently the seventh-largest cryptocurrency and the third-biggest stablecoin, boasting a market capitalization of $16.15 billion. Despite minor fluctuations throughout the day, BUSD has managed to remain true to its reputation of stability, never dipping below $0.9995. At the time of writing, the asset is trading at $0.9999, a testament to its reliability.
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