According to recent reports, the stablecoin issuer Paxos was reportedly engaging in conversations with the United States Securities and Exchange Commission (SEC) on the Binance USD (BUSD) stablecoin after getting a Wells notice from the relevant financial institution.
In an article that was released by Reuters on February 21, Charles Cascarilla, the chief executive officer of Paxos, was quoted as saying that the company was “engaging in productive negotiations” with the SEC and that they will continue to talk behind closed doors. This statement was made in reference to negotiations that are taking place between Paxos and the SEC. After the SEC filed a lawsuit against the issuer of the stablecoin, claiming that the BUSD cryptocurrency was an unregistered securities, the issuer of the stablecoin decided to publish the research shortly after the complaint was filed.
Cascarilla was quoted as saying that Paxos would consider initiating legal action in order to support its assertion that BUSD did not constitute a security. These stories are based on statements made by Cascarilla. Paxos has a license to operate in the state of New York in the United States, and on February 13, the New York Department of Financial Services issued an order forcing the company to stop the issuance of BUSD. Paxos possesses a license to operate in New York. The corporation has revealed that it would stop minting the stablecoin as of the 21st of February, as stated in the notice that it published.
It is possible that the investigation into Paxos was prompted by a tip from Circle, which supposedly lodged a complaint with the state regulator regarding Binance’s reserves. The New York Department of Financial Services is responsible for overseeing the financial industry in the state of New York. Binance’s analytics showed that there was a rush of withdrawals following the news concerning BUSD, with around $2.7 billion worth of cash leaving the site between February 12 and February 13. This information was disclosed on February 13.