According to the “Wall Street Journal” report , the U.S. Securities and Exchange Commission (SEC) plans to sue the stablecoin issuer Paxos because the authorities have determined that the US dollar stablecoin “Binance USD (BUSD)” issued and listed by the company is suspected of violating investors. protection law.
According to reports, BUSD is a stable currency co-founded by Paxos and the cryptocurrency exchange Binance. Paxos issues BUSD (ERC-20) on the Ethereum blockchain, but on the other hand, Binance is also on Binance. Binance-Peg BUSD (BEP-20) tokens pegged to BUSD are available on-chain.
The Wall Street Journal quoted people familiar with the matter as saying that the U.S. SEC has issued a “Wells Notice” to Paxos, which mentioned that BUSD is an “unregistered security” and plans to sue Paxos for violating investors. protection law.
Note: Wells Notice is an informal reminder issued by the law enforcement department of the US SEC before the company initiates a civil lawsuit. The company that receives the notice can communicate and negotiate with the SEC within 30 days. If the law enforcement officers still believe that the company violated securities regulations , will propose to the SEC to initiate an enforcement action, and then the SEC committee members will meet to vote whether to pass the law enforcement agency’s proposal.
BUSD is currently the third largest stablecoin with a market cap of over $16 billion. After the news came out, BUSD, which was supposed to peg the U.S. dollar exchange rate at a ratio of 1:1, once fell to $0.996881, and was at $0.997050 at press time .
In response to the above news, the US SEC and Paxos spokespersons declined to comment, while Binance said in a statement: “BUSD is issued and owned by Paxos, which only authorizes its brand. We will continue to monitor the situation.”
Not long ago, there were rumors in the market that the New York Department of Financial Services (NYDFS) is investigating Paxos. Although the scope of the investigation is not yet clear, the payment giant PayPal has heard the rumors and hastily stopped the stable payment that was originally scheduled to be launched in cooperation with Paxos in the next few weeks. currency.
Recently, the U.S. government is taking active actions against cryptocurrency regulation. On February 9, the U.S. SEC stated that the staking service provided by the cryptocurrency exchange Kraken is an “unregistered securities sale.” To this end, Kraken has agreed to pay a $30 million fine in exchange for a settlement and immediately stop providing cryptocurrency staking services to US users.
