The U.S. Securities and Exchange Commission (SEC) has announced its decision to drop the investigation into stablecoin issuer Paxos.
The U.S. Securities and Exchange Commission (SEC) has announced its decision to drop the investigation into stablecoin issuer Paxos, opting not to pursue an enforcement case. Jorge Tenreiro, the acting chief of the SEC's crypto assets and cyber unit, stated that the SEC will not recommend enforcement action against Paxos concerning the Binance USD (BUSD) token. This decision follows a Wells notice issued to Paxos in February 2023, in which the SEC claimed that BUSD was an unregistered security and that Paxos had violated federal securities laws.
Paxos responded to the SEC's decision with a statement on July 11, expressing satisfaction with the outcome. "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," the company said. "We are proud of our relentless advocacy for stable-value digital assets and that the SEC staff determined it will not bring enforcement action against Paxos in connection with BUSD."
The Wells notice issued to Paxos in February was part of a broader push by the SEC to regulate the growing digital asset market. At the time, the notice indicated that the SEC believed that Paxos was violating federal securities laws.
The company reiterated that “Paxos has and always will prioritize the safety of customer assets. Paxos issued stablecoins are always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. Paxos stands apart as the only issuer to secure regulatory oversight in order to introduce safe solutions that will drive significant innovation across the global financial system.”
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