Stablecoin

2024

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The Securities and Exchange Commission (SEC) has now decided to close its investigation into Paxos Trust Company over Binance USD (BUSD) stablecoin. This decision, communicated through a termination notice, is a major development in the stablecoins’ regulatory environment and provides some certainty for the industry. 
<h2 id="strong-sec-ends-paxos-busd-stablecoin-investigation-strong">SEC Ends Paxos BUSD Stablecoin Investigation</h2> 
According to a letter that was shared with <a href="https://coingape.com/new-york-regulator-orders-paxos-to-stop-creating-binance-busd/">Paxos</a> on July 9, Jorge Tenreiro, the acting chief of the SEC’s crypto assets and cyber unit informed Paxos that he would not be recommending an enforcement action. This notice came more than a year after the SEC sent Paxos a Wells notice indicating a possible enforcement action over the dollar-backed BUSD stablecoin, which Paxos issued in partnership with Binance. 
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
 “Paxos prevails in SEC investigation of BUSD stablecoin” <img src="https://s.w.org/images/core/emoji/15.0.3/72x72/1f44f.png" alt="👏" class="wp-smiley" style="height: 1em; max-height: 1em;"> 
 On Tuesday, we received a formal termination notice from the SEC stating that it will not recommend enforcement action against Paxos Trust Company in the investigation of Binance USD (BUSD). 
 View the letter and our… <a href="https://t.co/8kjysfsPg3">pic.twitter.com/8kjysfsPg3</a> 
 — Paxos (@Paxos) <a href="https://twitter.com/Paxos/status/1811405877733097703?ref_src=twsrc%5Etfw">July 11, 2024</a>
</blockquote> 
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
Despite these allegations, Paxos maintained that <a href="https://coingape.com/web-stories/cz-addresses-decline-in-busd-market-cap/">BUSD</a> was backed 1:1 with dollar-denominated reserves and was not considered as a security as per the criteria. This protracted probe raised a lot of concern within the crypto space, which impacted Paxos’ capacity to enter into new agreements. 
The SEC’s decision to halt the investigation follows a federal judge’s ruling in favor of Binance. On June 28, the judge concluded that BUSD sales were not a securities offering, thus, the charge connected to this was dropped. Consequently, this legal victory for Binance might have also impacted the SEC’s decision on Paxos in one way or the other. 
<h2 id="impact-on-paxos-and-the-stablecoin-sector">Impact on Paxos and the Stablecoin Sector</h2> 
Walter Hessert, the head of strategy at Paxos, breathed a sigh of relief following the conclusion of the investigation. He pointed out that the decision would allow Paxos to better focus on new enterprise partnerships. The closure of the SEC’s investigation should help create more clarity in the market and may also quicken negotiations with big enterprises including PayPal. 
This development also comes at a time when the stablecoin sector is growing across the globe. Earlier this month, Paxos got the green light from the central bank of Singapore to offer digital payment token services, enabling the firm to issue <a href="https://coingape.com/paxos-wins-approval-from-singapore-to-issue-stablecoins/">Singapore-compliant stablecoins</a>. This approval makes Paxos one of the few companies that can work in Singapore with its strict financial regulation. 
Despite having obtained the necessary licenses from various jurisdictions such as the United Arab Emirates and the United States, Paxos still has some issues. Lately, Paxos implemented a reduction of its workforce as a measure to enhance the organization’s performance. Nonetheless, these obstacles do not seem to have affected Paxos’s financial health, as the company has more than half a billion dollars on its balance sheet. 
Read Also: <a href="https://coingape.com/squarespace-hack-exposes-over-100-crypto-projects/">Squarespace Exploit Exposes Over 100 Crypto Projects</a> 
The post <a href="https://coingape.com/breaking-paxos-wins-as-sec-ends-busd-stablecoin-investigation/">Breaking: Paxos Wins as SEC Ends BUSD Stablecoin Investigation</a> appeared first on <a href="https://coingape.com">CoinGape</a>.

Breaking: Paxos Wins as SEC Ends BUSD Stablecoin Investigation

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