Key Takeaways:
- According to reports, Paxos Trust Corporation and the Securities and Exchange Commission are having a productive dialogue.
- The CEO of the company wrote in an email that they are prepared to use legal action to defend BUSD’s non-security status.
After receiving a Wells notice over the Binance USD stablecoin coin, stablecoin issuer Paxos informed staff that it is in “productive negotiations’ ‘ with the U.S. Securities and Exchange Commission (SEC).
Paxos CEO Charles Cascarilla stated in an email sent to Paxos workers on Saturday that “We are engaged in productive negotiations with the SEC, and we look forward to continuing that communication in private.” The email was analysed by Reuters.
According to Cascarilla, Paxos would contemplate using litigation to support its claim that BUSD was not a security. The New York Department of Financial Services, where Paxos has a licence because it is based there, ordered the business to stop issuing BUSD on February 13.
Binance, one of the leading cryptocurrency exchanges in the world, saw a rise in withdrawals last week. The increase in withdrawals happened after the Securities and Exchange Commission (SEC) ordered cryptocurrency company Paxos to stop producing Binnace stablecoin-BUSD.
In the internal email, Cascarilla added that the business was collaborating with the SEC on its application for a clearing agency licence. The company is also collaborating with the U.S. Office of the Comptroller of the Currency (OCC) to have its charter as a national trust bank approved.
In a subsequent resolution from the SEC Wells notice and the instruction from the New York Department of Financial Services, Cascarilla also declared that the company will sever its ties to Binance.
The Binance connection “no longer corresponds with our current strategic aims” due to the market’s evolution, he claimed.
According to Cascarilla, the company’s decision to sever ties with Binance stands apart from both the NYDFS directive and its discussions with the SEC on Binance USD.
Speaking of severing ties, Binance was also considering doing so with its US partners as pressure from regulators increases in the wake of multiple high-profile crypto crackdowns there.
The company is also reviewing its American venture capital investments, and the exchange is open to delisting any tokens issued by US-based businesses, including Circle’s USD stablecoin.
