The SEC may potentially sue Paxos over BinanceUSD – WSJ

The U.S. Securities and Exchange Commission (SEC) enforcement division has issued a Wells notice to Paxos — The Wall Street Journal (WSJ) reported, citing anonymous sources.

The New York Department of Financial Services instructed Paxos Trust Co. — the issuer of stablecoin Binance USD (BUSD) — to halt any further creation of BUSD, according to the WSJ.

The Wells notice

A Wells notice is a formal notice the SEC issues to inform the recipient that it plans to bring enforcement actions against it.

The SEC plans to sue Paxos for allegedly violating securities and investor protection laws. BUSD is considered an unregistered security, according to the notice.

Paxos issued the 1:1 dollar-pegged stablecoin in partnership with Binance in September 2019. Since then, BUSD has grown to be the third-largest stablecoin and the seventh-largest cryptocurrency — with a market cap of $16.15 billion  — according to CryptoSlate data.

What happens next

A Wells notice does not mean that the SEC will take enforcement action. The five commissioners of the SEC have to vote to authorize any enforcement litigation or settlement by the agency.

Paxos can submit a written response to the Wells notice and present its case as to why it should not be sued.

When the SEC nearly doubled its Crypto Assets and Cyber Unit in May 2022, it said that stablecoins would be an area of focus. Stablecoins are similar to bank deposits or money-market mutual funds, according to SEC Chairman Gary Gensler.

Article updated 09:10 GMT to add details.

Bookmark (0)
ClosePlease loginn

Related Posts

A sincere thank you to our valuable sponsors: CoinDesk, Nexo and 1inch

A sincere thank you to our valuable sponsors: CoinDesk, Nexo and 1inch

Discover the cutting-edge services of CoinDesk and Nexo, the leading names in crypto and blockchain, and unlock the full potential of your digital assets.

Bookmark (0)
ClosePlease loginn
U.S. government sold over 9k BTC for $215.7M on March 14

U.S. government sold over 9k BTC for $215.7M on March 14

The US government said it plans to liquidate over 40,000 Bitcoin in four batches during this calendar year.

Bookmark (0)
ClosePlease loginn
Justin Sun’s Grenada ambassadorship to WTO ends

Justin Sun’s Grenada ambassadorship to WTO ends

Grenada’s local media reported that Justin Sun had been recalled after the political party that appointed him lost elections in June 2022.

Bookmark (0)
ClosePlease loginn
More than 50% of Bitcoin mining uses renewable energy

More than 50% of Bitcoin mining uses renewable energy

Almost a quarter of all Bitcoin miners use water to power their setups, while wind and nuclear are the second and third biggest contributors.

Bookmark (0)
ClosePlease loginn
Bittrex to halt US operations by end of April

Bittrex to halt US operations by end of April

The cryptocurrency exchange will only serve global customers going forward.

Bookmark (0)
ClosePlease loginn
Binance.US transitioning to new bank providers; briefly affecting deposits, withdrawals

Binance.US transitioning to new bank providers; briefly affecting deposits, withdrawals

Many transfer methods, including Signature ACH transfers, are affected.

Bookmark (0)
ClosePlease loginn

Leave a Reply

Your email address will not be published. Required fields are marked *