Paxos will stop issuing new BUSD at the request of regulators
In this, the company will continue to redeem the available stablecoins on the market
13.02.2023 - 09:00
317
2 min
0
What’s new? The New York Department of Financial Services (NYDFS) has issued an injunction against fintech company Paxos, the issuer of Binance USD (BUSD) and Pax (USDP) stablecoins. The regulator ordered the company to stop issuing new BUSD while continuing to manage the redemption of stablecoins, according to The Wall Street Journal.
Paxos was founded in 2012. It uses tokenization, storage, trading, and settlement technologies for digital assets for corporate clients. In March 2022, it was licensed by the Central Bank of Singapore. In August, it announced the launch of a cryptocurrency exchange jointly with PicPay, a Brazilian payment app. In October, it began preparing to launch a platform for trading cryptocurrency through banks jointly with Mastercard.
What else is known? CoinDesk wrote about the NYDFS investigation into Paxos last week. Earlier, analyst Colin Wu reported that the US Treasury Department urged Paxos to withdraw its application for a banking license, but the company denied those rumors.
In addition, the US Securities and Exchange Commission (SEC) issued an injunction to Paxos based on the results of its own investigation. The SEC believes that BUSD is an unregistered security and intends to hold Paxos liable for the issuance of the asset and violation of investor protection laws.
BUSD, issued by Paxos under the brand of the Binance crypto exchange, is the third largest in the crypto market after USDT and USDC and ranks seventh in the overall ranking of cryptocurrencies with a capitalization of $16,16 billion.
Against the backdrop of increased regulatory attention to the industry, the PayPal payment system suspended the development of its own stablecoin. Paxos acted as a partner in the project.
Useful material?
Business
Earlier, Brad Garlinghouse claimed apparent harassment of the company by the US authorities
May 14, 2024
Crypto regulations
According to Brad Garlinghouse, the magnitude of the impact of such harassment on the crypto ecosystem is beyond prediction
May 13, 2024
Crypto regulations
The condition is part of the exchange’s agreement with authorities to plead guilty to regulatory violations
May 13, 2024
Market
The USDT issuer responded by saying that the report lacked sufficient data to support such claims
May 10, 2024
Incidents
The breach was reported to Binance by the head of its monitoring department, who was later fired
May 9, 2024
Trends
In April, the project’s launch on the crypto exchange was postponed twice
May 9, 2024