According to information obtained by CoinDesk, the New York Department of Financial Services (NYDFS) stablecoin issuer cryptocurrency company Paxos is investigating.
Paxos Subject to Investigation Is the Issuer of USDP and BUSD Stablecoins
The full scope of the investigation is unclear. Paxos’ stablecoins include the Pax Dollar (USDP) and Binance USD (BUSD), a Binance-branded stablecoin available through a service.
An NYDFS spokesperson said the agency could not comment on ongoing investigations.
Recently, Paxos was in the news amid rumors that it may ask the Office of the Comptroller of the Currency (OCC), a federal bank regulator, to withdraw its application for a full banking contract. Paxos denied these rumors.
However, an ongoing investigation by a state regulator indicates that the company, which received an interim bank charter from the OCC in 2021, is indeed under closer scrutiny than its peers.
Paxos also holds a virtual currency license, commonly referred to as BitLicenses, issued by NYDFS.
A Paxos spokesperson has not responded to a request for comment as of this writing.
NYDFS published stablecoin guidance in June, directing issuers to ensure that their stablecoins are fully backed and regularly certified by segregated assets from issuers’ funds.
Released after the collapse of the Terra (LUNA) stablecoin ecosystem, the guide focuses on asset-backed stablecoins. Inspector Adrienne Harris said at the time that NYDFS had been working on the guideline since before the collapse.
*Not investment advice.
For exclusive news, analytics and on-chain data Telegram our group, twitter our account and YouTube Follow our channel now! Moreover Android And iOS Start live price tracking right now by downloading our apps!