Paxos ditches Binance as they Prepare to Battle the SEC
Paxos is gearing up for a fight!
Hey Peeps!
On February 13th, Paxos announced, via press release, that they will halt the minting of new BUSD tokens, and an end to the business relationship with Binance for the branding of the stablecoin.
Paxos is the owner and issuer of the stablecoin, Binance USD (BUSD), and describes themselves as "the leading regulated blockchain & tokenization infrastructure platform".
Within the press release, Paxos explicitly states that "Existing Tokens Remain Fully-Backed and Redeemable Through Paxos Trust Company Through At Least February 2024".
However, this is worrying to some as there are questions regarding BUSD being "fully-backed and redeemable" after February 2024.
Later that same day, Paxos published a second press release, stating that the company has received a Wells Notice, from the U.S. Securities and Exchange Commission on February 3rd, notifying them of potential charges related to BUSD being an unregistered security.
BUSD has been approved and regulated by the New York State Department of Financial Services (NYDFS) since 2019.
Based off this, I personally do not know how the SEC could come after a company for a crypto that is already being regulated.
"Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws. This SEC Wells notice pertains only to BUSD. To be clear, there are unequivocally no other allegations against Paxos. Paxos has always prioritized the safety of its customers’ assets. BUSD issued by Paxos is always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary."
- Paxos Press Release
It seems Paxos is gearing up for a big fight against the SEC if they do intend to follow though with their lawsuit threat.
The SEC is surely making a lot of enemies in the cryptocurrency world lately, as they have recently tackled Kraken's staking program and are reportedly contemplating charges against Coinbase over their staking services.
Staking is under threat here in the United States at the moment.
What are your thoughts on this news?
Do you think the SEC is going to come for every crypto platform within the United States?
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