The acting chief of the SEC’s crypto assets and cyber branch notified Paxos in a letter.
A sense of relief washed over Paxos’s head of strategy, Walter Hessert.
After reviewing Paxos Trust Company’s Binance USD (BUSD) stablecoin, the U.S SEC has chosen to end its inquiry. Announced via a termination notice, the outcome brings much-needed clarity to the industry’s regulatory landscape regarding stablecoins.
The acting chief of the SEC’s crypto assets and cyber branch, Jorge Tenreiro, notified Paxos in a letter shared on July 9 that he would not be proposing an enforcement action. This letter was given almost a year after Paxos and Binance’s dollar-backed BUSD stablecoin was indicated in a Wells notice by the SEC as a potential enforcement action.
In spite of these claims, Paxos insisted that BUSD did not meet the requirements for a security. As it was pegged 1:1 with reserves denominated in U.S dollars. The crypto sector was understandably worried by this drawn-out investigation, which hindered Paxos’ ability to sign new deals.
Forging New Collaborations
Binance was vindicated by a federal court, which likely led the SEC to decide to stop the inquiry. The case related to this was withdrawn on June 28 because the court determined that the sales of BUSD did not constitute a securities offering. Therefore, the SEC’s decision on Paxos could have been affected in some manner by this court win for Binance.
Moreover, a sense of relief washed over Paxos’s head of strategy, Walter Hessert, as the probe came to a close. Also, he made note of how the move will free up Paxos to concentrate on forging new collaborations with businesses. Now that the SEC’s inquiry is over, the market should be clearer, and talks with large companies like PayPal might go much more quickly.
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