Paxos in Talks with SEC Over Stablecoin Controversy and Regulatory Challenges
Paxos Trust Company is reportedly engaged in productive discussions with the U.S. Securities and Exchange Commission (SEC) after facing enforcement actions over its stablecoin, Binance USD (BUSD).
While Paxos received a “Wells Notice” from the SEC on February 3, the company has said that it disagrees with the idea that BUSD is a security and is prepared to litigate the matter.
Recently, Paxos faced regulatory issues, including a freeze on BUSD production ordered by the New York Department of Financial Services.
Following the freeze of BUSD production, Paxos announced that it will terminate its partnership with Binance for the BUSD stablecoin. Additionally, Paxos assures that all BUSD tokens have consistently been backed by US dollar-denominated reserves at a 1:1 ratio.
Paxos has also stated that it is working towards obtaining a clearing agency license and final approval for its national trust bank charter from the U.S. Office of the Comptroller of the Currency (OCC).