The United States Securities and Exchange Commission (SEC) is reportedly planning to sue Paxos, which notably issues Binance’s BUSD stablecoin, for violating investor protection laws.
https://cryptoast.fr/busd-binance-menace-sec-attackait-emissioner-paxos/
The SEC would target Paxos and the BUSD
According to a Wall Street Journal publication, the Securities and Exchange Commission (SEC) reportedly sent a letter to Paxosin which the regulator would notify the company of a “ possible legal proceedings “.
More specifically, it would be a “Wells notice”, a letter that the SEC sends to companies when it plans to take enforcement action against them.
However, that doesn’t necessarily mean that the SEC will actually bring charges against Paxos. The recipients of a Walls notice are, within 30 days, entitled to respond to the SEC justifying why the latter should not pursue legal action.
What would the SEC blame Paxos for? The fact that BUSD would not be a registered security. For the SEC, this is therefore considered a “violation of investor protection laws”.
Indeed, although BUSD is the stablecoin of the Binance ecosystem, this one is fully issued by Paxos, an American company regulated in the state of New York. Launched in 2019, BUSD is also the 3rd most capitalized stablecoin in the cryptocurrency market, exceeding $16 billion.
As of this writing, the Securities and Exchange Commission has not yet commented on whether or not there has been a potential investigation into Paxos.
💡 Find our complete sheet on Binance’s BUSD
This potential new SEC operation appears to be related to a broad investigation of US cryptocurrency-related businesses.
Last week, it is in particular the Kraken platform which has paid the price. Hit for a fine of 30 million dollars, Kraken has also taken the decision to close its staking service for its American users.
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Source: The Wall Street Journal
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Editor-in-chief of Cryptoast, I discovered Bitcoin and blockchain technology in 2017. Since then, I have been striving to share quality content so that the sector becomes more democratic for everyone.
Clement Wardzala
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