Paxos recently announced a major victory in its investigation by the U.S. Securities and Exchange Commission (SEC). On July 9, 2024, Paxos received a formal closure notice from the SEC stating that the regulator would not recommend enforcement action against the Paxos Trust Company in connection with its investigation into the Binance USD (BUSD) stablecoin.

(Binance kicks the iron? The judge approves most of the SEC’s charges. Only BUSD and coin-earning services are not investment contracts)

Last year’s SEC investigation into Binance’s stablecoin BUSD

In February 2023, Paxos received a Wells Notice (a securities-related investigation) from the SEC, which generally means that SEC staff has concluded that grounds for enforcement action exist. However, Paxos believes its U.S. dollar-backed stablecoin does not meet the definition of a security under federal securities laws. The SEC later closed its investigation without taking any enforcement action.

Paxos: Results are positive for stablecoins

According to Paxos, the conclusion of the SEC investigation is expected to have a profound impact on global corporate adoption of stablecoins. This development will catalyze a new wave of stablecoin adoption, especially those designed with strong consumer protections. According to Paxos, well-designed stablecoins can transform financial systems, especially in payment, settlement and remittance applications, making them more stable, accessible and transparent.

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