Paxos, the blockchain infrastructure platform behind the Binance USD (BUSD) stablecoin, announced on Thursday that the firm's investigation into its dollar-pegged tokens has been dropped. 🎉 This represents a major legal victory for the crypto world, where a thick fog reigns over the legal classification and regulatory treatment of stablecoins. 😎

The SEC began its investigation of BUSD in February 2023 and sent a formal termination notice to Paxos on July 9, stating that it would not impose further sanctions. “Paxos Trust Company has always maintained that its USD-backed stablecoins are not securities under the federal securities laws and that the Wells Notice is unfair and unfair,” Paxos said in a Thursday press release. “We believe this development will usher in a new wave of stablecoin adoption by leading global companies.” 🚀

BUSD was the third-largest stablecoin alongside Tether (USDT) and Circle USD (USDC) and was rapidly gaining market share thanks to Binance's efforts to build liquidity around it. However, Binance was forced to abandon the asset, and since 2023, Tether's stablecoin dominance has exploded to 69.19% of the entire market, according to DefiLlama.

The outcome of the SEC's investigation – and potential lawsuit – against Paxos and BUSD has major implications for the crypto world. USDT and USDC operate in a very similar way to how BUSD functions, meaning that if a court ruling stated that BUSD is an unregistered security, Tether and Circle could face a similar fate.

So what do you think? What impact will Paxos' victory have on the future of stablecoins? We are waiting your comments! 👇