In light of the continuing investigation by New York regulators, blockchain infrastructure platform Paxos Trust Company will stop issuing new Binance USD (BUSD) stablecoins. The third-largest stablecoin in the world, Binance USD, is purportedly under scrutiny by the SEC.
The Securities and Exchange Commission intends to file a lawsuit against cryptocurrency trading company Paxos Trust for creating and listing the BUSD stablecoin without first registering it as a security, according to the Wall Street Journal.
“BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024. New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust,” Paxos said in a statement.
According to a statement from Binance, Paxos is expected to keep overseeing product redemptions. The latest regulatory action occurs while the market for cryptocurrencies experiences increasing unpredictability. The SEC recently also declared that open violations of the securities laws are caused by crypto staking.
Earlier today, CZ, the founder, and CEO of Binance, tweeted that Paxos had notified him that the New York Department of Financial Services, where Paxos is registered and subject to regulation, had ordered the business to stop issuing BUSD.
5/ On the alleged SEC vs Paxos lawsuit, I have no information about it, other than public news articles. The lawsuit is between the US SEC & Paxos.
I am not an expert on US laws. But personally, I agree with Mile’s logic here (not that it means much): https://t.co/b8H3bjLAoy
— CZ 🔶 Binance (@cz_binance) February 13, 2023
He also revealed and said, “On the alleged SEC vs Paxos lawsuit, I have no information about it, other than public news articles. The lawsuit is between the US SEC & Paxos.I am not an expert on US laws. But personally, I agree with Mile’s logic here (not that it means much)”
Since 2019, when Paxos Trust entered into a licensing arrangement with Binance, the largest cryptocurrency exchange in the world, to use its name and brand.
