Breaking đ¨: Paxos Wins as SEC Ends BUSD Stablecoin Investigation đ¨
The Securities and Exchange Commission (SEC) has now decided to close its investigation into Paxos Trust Company over its Binance USD (BUSD) stablecoin. This decision, communicated through a termination notice, is a major development in the stablecoinsâ regulatory environment and provides some certainty for the industry.
SEC Ends Paxos BUSD Stablecoin Investigation
According to a letter that was shared with Paxos on July 9, Jorge Tenreiro, the acting chief of the SECâs crypto assets and cyber unit informed Paxos that he would not be recommending an enforcement action. This notice came more than a year after the SEC sent Paxos a Wells notice indicating a possible enforcement action over the dollar-backed BUSD stablecoin, which Paxos issued in partnership with Binance.
Despite these allegations, Paxos maintained that BUSD was backed 1:1 with dollar-denominated reserves and was not considered as a security as per the criteria. This protracted probe raised a lot of concern within the crypto space, which impacted Paxosâ capacity to enter into new agreements.
The SECâs decision to halt the investigation follows a federal judgeâs ruling in favor of Binance. On June 28, the judge concluded that BUSD sales were not a securities offering, thus, the charge connected to this was dropped. Consequently, this legal victory for Binance might have also impacted the SECâs decision on Paxos in one way or the other.
