Paxos, a US-based regulated blockchain and tokenization infrastructure platform, has announced that it received a formal termination notice from the U.S. Securities and Exchange Commission (SEC) on July 9, 2024. This notice indicates that the SEC will not recommend enforcement action against Paxos Trust Company regarding the investigation of the Binance USD (BUSD) stablecoin.
Paxos issued the following statement:
“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. We are proud of our relentless advocacy for stable-value digital assets and that the SEC staff determined it will not bring enforcement action against Paxos in connection with BUSD.
We believe this development will unlock a new wave of stablecoin adoption by leading global enterprises. Well-designed stablecoins with strong consumer protections – like those issued by Paxos – will transform the financial system in payments, settlement, and remittance use cases. This transformative technology will make the financial system more stable, accessible, and transparent.
Paxos has and always will prioritize the safety of customer assets. Paxos issued stablecoins are always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. Paxos stands apart as the only issuer to secure regulatory oversight in order to introduce safe solutions that will drive significant innovation across the global financial system.”
Conclusion
This recent development marks a significant milestone for Paxos, reinforcing its position in the stablecoin market. The conclusion of the SEC investigation into Paxos without any enforcement action is a critical validation of Paxos’ regulatory compliance and operational integrity.
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