Recently, the focus of regulators seems to be on Bitcoin and altcoin projects. Specifically, various steps are being taken for stablecoins pegged to a particular asset among altcoin projects. Paxos, the issuer of Binance’s stablecoin BUSD, received a Wells notice the other day. This has also raised concerns about other stablecoins. However, USD Coin (USDC) issuer Circle has denied rumors that it has received a “Wells notification” on its USD-pegged stablecoin. Here are the details…
Wells statement claim for altcoin
On February 14, a now-deleted tweet by Fox Business reporter Eleanor Terrett claimed that Circle was ordered by the U.S. Securities and Exchange Commission to halt the sale of USDC because the stablecoin is an unregistered security. But that rumor was quickly dismissed by Dante Disparte, Circle Pay’s chief strategy officer and head of global policy. Responding on Twitter just 15 minutes after Terrett’s tweet, Disparte said his firm had not received a Wells Notice.
A Wells Notice is a formal notice sent by the SEC notifying the recipient that the agency intends to file enforcement action against them. In response to Circle’s refusal, Terrett said he went “at the word of several reliable sources” and apologized for the mistake. Dante accepted his apology, adding:
Unfortunately, there is a lot of turmoil, whirlpool and rumor informing the market right now.
Circle received no notice from the SEC
Terrett’s original tweet has since been deleted. His Twitter account was temporarily deleted, but has since returned. Fears of legal action against stablecoin issuers have increased this week, following Binance USD issuer Paxos Trust Company. BUSD confirmed it received a Wells Notice claiming it did not record the offering under federal securities laws. Asked earlier this week if Circle had received a similar notice from the SEC regarding USDC, Disparte said:
Circle claims that USDC is a regulated digital currency issued as stored value under US money transfer law. The facts and circumstances in any regulatory action like this are all different, as are the structural and regulatory aspects of each of the cryptocurrencies in circulation around the world.
However, in BUSD’s self-promotion, it is stated that Binance USD (BUSD) is a 1:1 USD backed stablecoin issued by Binance (in partnership with Paxos), approved and regulated by the New York State Department of Financial Services (NYDFS). Launched on September 5, 2019, BUSD aims to combine the stability of the dollar with Blockchain technology. It is a digital fiat currency issued as ERC-20 and supports BEP-2.
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