SEC’s cryptocurrency-focused moves continue. His latest move puts PayPal on target this time. As is known, PayPal launched its own stablecoin project, PYUSD. That’s why it’s on the SEC’s radar. Let’s look at the details.
Pressure on PayPal over cryptocurrency
PayPal (PYPL) has received a subpoena from the U.S. Securities and Exchange Commission (SEC) requesting documents related to its USD stablecoin, as revealed in a recent filing. The company did not provide specific details on the subject. However, it seems that this issue is related to the cryptocurrency move. Accordingly, this development underscores the regulatory scrutiny surrounding stablecoins.
In August, PayPal took a remarkable step in the cryptocurrency and finance sectors. Accordingly, it came up with a stablecoin fixed to the US dollar. PayPal entered the cryptocurrency market by launching USD (PYUSD).
When did the subpoena come?
The subpoena from the U.S. SEC Enforcement Division was received on November 1, 2023, according to PayPal’s quarterly earnings report released Wednesday. Accordingly, the summons is related to PayPal’s cryptocurrency move, namely the PayPal USD stablecoin. The subpoena specifically requests the production of documents. Additionally, PayPal is actively cooperating with the SEC regarding this investigation. However, it is also interesting that the move came after PayPal received approval for cryptocurrency services from the UK.
PayPal’s entry into the stablecoin field is noteworthy. It marks a significant milestone as the first major financial services firm to do so. This move was met with both interest and concern in Washington. Because it evoked memories of Facebook’s previous stablecoin attempt, Libra, which is now associated with Meta Platforms (META) and never materialized. PayPal’s stablecoin has added a new dimension to the ongoing debate around cryptocurrencies. It also potentially impacted the regulatory environment.
Move from Circle
Stablecoin issuer Circle took a notable stance in September by intervening in the SEC’s lawsuit against Binance. Circle notes that traditional financial trading laws should not apply to stablecoins, given their inherent connection with other assets. PYUSD, an Ethereum-based token, was first offered to PayPal’s online payment customers before being expanded to the Venmo app.
PayPal has been facilitating crypto transactions since 2020. It also expanded the same service to Venmo in April 2021. In 2022, PayPal allowed users to transfer crypto assets to third-party wallets. So he improved his offerings even further. On the other hand, when we look at Kriptokoin.com, it expanded this feature to Venmo in April 2023. PayPal’s entry into the cryptocurrency and stablecoin markets continues to be closely monitored by regulators.
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