Key takeaways:
- The US SEC plans not to pursue enforcement action against Paxos, the stablecoin issuer, and to complete its inquiry into the company.
- Paxos received an SEC Wells notice in February 2023 alleging that the platform had broken federal securities laws and that BUSD was an unregistered security.
The US Securities and Exchange Commission (SEC) plans not to pursue enforcement action against Paxos, the stablecoin issuer, and to complete its inquiry into the company.
The interim head of the crypto assets and cyber branch, Jorge Tenreiro, stated in a letter dated July 9 that the SEC would not suggest taking enforcement action against Paxos for the Binance USD (BUSD) token.
Paxos received an SEC Wells notice in February 2023 alleging that the platform had broken federal securities laws and that BUSD was an unregistered security. In a statement dated July 11, Paxos said:
“Paxos Trust Company has always maintained that its USD-backed stablecoins are not securities under federal securities laws and that the Wells notice was unwarranted and unjustified,”
Following many court verdicts against the regulator, including its pursuit of specific tokens as securities, the SEC decided to end its inquiry.
In the July 2023 ruling in SEC v. Ripple, a federal judge determined that the XRP coin was not eligible as a security with respect to programmatic sales on digital asset exchanges. The judge presiding over the SEC’s case against Binance dismissed a claim pertaining to BUSD in June 2024, citing the Ripple verdict.
The SEC is now pursuing enforcement actions against several cryptocurrency companies, such as Coinbase, Ripple, Binance, and Kraken. However, after a Supreme Court decision that no longer mandates courts to defer to federal agencies in interpreting policy, officials might have to reconsider cases.
Recently, Paxos International’s blockchain and tokenization technology has received full regulatory accreditation from the Monetary Authority of Singapore (MAS). The Singapore office of Paxos, which produces the gold-backed stablecoin Pax Gold (PAXG), has been granted the right to offer digital payment token services as a Major payment institution.
Paxos can now launch a stablecoin that conforms with the upcoming MAS legal framework thanks to the regulatory license.
