paxos, BUSD He said he absolutely disagrees with the SEC on the stablecoin.
Cryptocurrency company Paxos acknowledged on Monday that it received a Wells notice from the SEC regarding its Binance USD (BUSD) stablecoin.
Paxos has stopped new BUSD minting following an order from New York financial regulators. The company said it “strongly disagrees with SEC staff because BUSD is not a security under federal securities laws.”
Paxos Says It Is Ready To File A Lawsuit Regarding BUSD If Necessary
The Wells notice states that SEC staff are considering proposing an action claiming that BUSD is a security and that Paxos must register its BUSD offering under federal securities laws. Paxos released the following statement:
“Paxos strongly disagrees with SEC staff that BUSD is not a security under federal securities laws. This SEC Wells statement is about BUSD only. To be clear, no other claims have been made against Paxos. Paxos has always given priority to the security of its clients’ assets.
BUSD issued by Paxos is always backed 1:1 by US dollar reserves, fully segregated and held in bankruptcy-free accounts. We will discuss this with SEC staff and are prepared to take strong action if necessary.”
According to information that has recently emerged, Circle, another stablecoin issuer, was the institution that reported Binance USD.
Bloomberg reported on Monday that Circle complained to the New York Department of Financial Services (NYDFS) in the fall of 2022 that blockchain data revealed that Binance did not have sufficient reserves to support the BUSD tokens it issues through Paxos.
A spokesperson for NYDFS on Monday told Reuters that Paxos does not manage BUSD “safely and soundly” and therefore “special, periodic risk assessments and status for BUSD customers issued by Binance and Paxos to prevent bad people from using the platform. violated its obligation to make renewals.
NYDFS had instructed Paxos to cease printing BUSD due to concerns over its relationship with Binance.
*Not investment advice.
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