• Crypto firm Paxos is facing charges from the SEC over its issuance of Binance USD, a stablecoin.
• The New York state financial regulator has issued a cease-and-desist letter to the crypto company.
• The SEC has also recently charged other US crypto firms such as Kraken and Gemini for similar offenses.
Paxos Faces Charges from the SEC
Crypto firm Paxos is expecting to face charges from the Securities and Exchange Commission (SEC) over its issuance of BUSD, the Binance-centered stable coin. The New York state financial regulator has issued a cease-and-desist letter to Paxos claiming that the firm should not be providing investors with access to Binance USD any further.
Other Crypto Companies Recently Charged By SEC
The SEC charges aimed at Paxos were delivered through what’s called a Wells notice. This informs a company of pending charges before they’re officially filed. It appears the SEC is all set to label BUSD a security. This is the same approach it has taken to so many other U.S.-based crypto firms and trading platforms including Gemini, Kraken, and Genesis.
Statement From Paxos Regarding Situation
Paxos has since put out the following statement regarding the situation: Effective February 21, Paxos will cease issuance of new BUSD tokens as directed by and working in close coordination with the New York Department of Financial Services… This action does not impact our ability to continue serving new or existing customers, our continued dedication to grow our staff, or fund our business objectives.“
Response To Charges From The Crypto Sphere
Many in the crypto space – including Brian Armstrong, the CEO of rival Coinbase – have taken to social media to say they will do all they can to defend staking services which are not securities according to them.
Paxos Will Fight Charges
A spokesperson for Paxos said that the company will fight these charges claiming: “Paxos categorically disagrees with the SEC staff because BUSD is not a security under federal securities law.“