Thursday, 23 March 2023

Crypto News

Paxos to face SEC lawsuit over Binance USD: Report

Paxos to face SEC lawsuit over Binance USD: Report

The United States Securities and Exchange Commission (SEC) has reportedly told blockchain infrastructure company Paxos that it plans to sue the firm for violations of investor protection laws alleging the Binance USD (BUSD) stablecoin is an unregistered security.

Paxos is theowner and issuer of BUSD — a U.S. Dollar-collateralized stablecoin — since the firm struck a partnership with Binance in September 2019. It is the third largest stablecoin, with a market cap currently exceeding $16 billion.

According to a Feb. 12 report in The Wall Street Journal citing people familiar with the matter, the SEC issued a Wells notice to Paxos — a letter the regulator uses to tell companies of impending enforcement action.

It’s unclear if the notice relates to Paxos’ issuance or listing of BUSD.

Reports emerged last week that Paxos was being investigated by the New York Department of Financial Services (NYDFS), however, 

Paxos is also the creator of the Paxos Dollar (USDP) which was launched in 2018 and is behind digital asset exchange itBit, which it launched in 2012 alongside the founding of Paxos.

Cointelegraph has reached out to Binance for comment but did not receive an immediate response.

This is a developing story, and further information will be added as it becomes available.