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SEC Ends Investigation into Paxos Over BUSD

Paxos won't be charged over Binance deal, but they're not totally in the clear yet.
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Jul 11, 2024 • 1 min read

The Securities Exchange Commission (SEC) does not intend to pursue charges against Paxos for issuing Binance’s BUSD stablecoin following a 16-month investigation.

What’s the Scoop?

  • Paxos Prevails? BUSD issuer Paxos has received a “formal termination notice” from the SEC, announcing that agency staff will not recommend formal enforcement action against the firm in the Binance case.

Bankless Take:

While SEC enforcement action targeting Paxos specifically is no longer likely in this matter, the provided notice does not rule out potential action from the broader investigation, leaving BUSD’s security designation unknown.

Further, although SEC enforcement action against Paxos was an ongoing concern, it was the New York Department of Financial Services (NYDFS) who ordered Paxos to cease issuing BUSD due to its lack of oversight over the minting process and creation of “Binance-Peg BUSD” not issued by Paxos, rendering the situation in its entirety lamentably unresolved.

 

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

Published in Bankless

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