Paxos in Talks With SEC Over Binance Stablecoin: Report

Major blockchain infrastructure platform Paxos Trust Company is holding discussions with the US Securities and Exchange Commission (SEC) concerning Binance stablecoin BUSD, according to a report by Reuters.

The company earlier received a notice from New York authorities to cease minting BUSD.

• According to Reuters on Tuesday (Feb. 21, 2022), Charles Cascarilla, CEO of Paxos, sent an email to the firm’s employees on Feb. 18, informing them that the company is holding “constructive discussions” with the SEC.
• Earlier in February, Paxos received a Wells notice from the American regulator alleging that the firm was selling unregistered securities, indicating that the Binance-branded BUSD was a security.
• Cascarilla further said Paxos was looking to continue its discussions with the Securities and Exchange Commission privately, adding that the firm was ready to defend its stance that BUSD was not a security if it was necessary.
• The New York Department of Financial Services (NYDFS) also ordered Paxos to stop issuing the Binance stablecoin from Feb. 21, with the blockchain platform stating that it would support BUSD until 2024.
• It’s worth noting that the US securities watchdog has been on the hunt for different cryptocurrency services it believes could be unregistered securities. Such was the case with Kraken’s staking services, which the veteran exchange had to halt earlier this year.
• There’re rumors that the SEC’s next target could be Coinbase, as it offers similar staking services. However, the company’s execs insisted on several occasions that this was not the case.