{"id":1265,"date":"2023-02-20T05:02:16","date_gmt":"2023-02-20T10:02:16","guid":{"rendered":"https:\/\/embarrdowns.com\/sec-investigating-paxos-busd-tokens-binance-issues-50-million-in-trueusd\/"},"modified":"2023-02-20T05:02:17","modified_gmt":"2023-02-20T10:02:17","slug":"sec-investigating-paxos-busd-tokens-binance-issues-50-million-in-trueusd","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/sec-investigating-paxos-busd-tokens-binance-issues-50-million-in-trueusd\/","title":{"rendered":"SEC Investigating Paxos\u2019 BUSD Tokens, Binance Issues $50 Million in TrueUSD"},"content":{"rendered":"

On February 21, Paxos will cease issuing new Binance USD (BUSD) tokens as directed by the New York Department of Financial Services.[0]<\/a><\/sup> This decision comes as the Securities & Exchange Commission (SEC) is considering taking action against the Paxos-issued cryptocurrency, alleging that it is an unregistered security.<\/p>\n

Paxos ensures that BUSD tokens issued by Paxos Trust are always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts.[1]<\/a><\/sup> All funds are safe and fully covered by reserves in their banks.[2]<\/a><\/sup> In addition, Paxos has committed to continue supporting BUSD tokens and will remain redeemable to onboarded customers through at least February 2024.[2]<\/a><\/sup> Customers have the option to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP) \u2013 another regulated US dollar-backed stablecoin issued by Paxos Trust.[3]<\/a><\/sup><\/p>\n

In response to this news, Binance has minted nearly $50 million worth of TrueUSD (TUSD).[4]<\/a><\/sup> This stablecoin is pegged to the US dollar, and is the sixth largest stablecoin in the market with a circulation of $973 million.[2]<\/a><\/sup> Additionally, Binance CEO Changpeng Zhao (CZ) has warned of \u201cprofound impacts\u201d on the crypto industry if BUSD is ruled as a security.[5]<\/a><\/sup><\/p>\n

This clampdown on the digital assets sector follows the SEC\u2019s enforcement action against Kraken \u2013 another crypto exchange \u2013 for alleged unregistered offering and sale, in connection with Kraken\u2019s crypto staking platform. In response, Binance briefly halted US dollar transfers.[3]<\/a><\/sup><\/p>\n

The SEC\u2019s Wells notice to Paxos suggests that the regulator is of the view that BUSD is a security and that Paxos should have registered the offering of BUSD under the federal securities laws.[6]<\/a><\/sup> However, Paxos has stated that it \u201ccategorically disagrees\u201d with the SEC on this matter and is \u201cprepared to vigorously litigate if necessary.<\/p>\n

0. <\/span>“Crypto Takedown Explained” The Defiant – DeFi News, 16 Feb. 2023, https:\/\/thedefiant.io\/crypto-takedown-explained<\/a><\/a><\/p>\n

1. <\/span>“Paxos Will Halt Minting New BUSD Tokens” PR Newswire, 13 Feb. 2023, https:\/\/www.prnewswire.com\/news-releases\/paxos-will-halt-minting-new-busd-tokens-301744964.html<\/a><\/a><\/p>\n

2. <\/span>“Stablecoin issuer Paxos ordered to halt creation for Binance USD” AOL, 13 Feb. 2023, https:\/\/www.aol.com\/stablecoin-issuer-paxos-ordered-halt-134410690.html<\/a><\/a><\/p>\n

3. <\/span>“US regulator orders crypto firm to stop minting Binance stablecoin” CNN, 15 Feb. 2023, https:\/\/www.cnn.com\/2023\/02\/14\/investing\/paxos-binance-busd-halt-order-us-intl-hnk\/index.html<\/a><\/a><\/p>\n

4. <\/span>“Binance mints 50M TrueUSD days after Paxos ordered stop issuing BUSD” Cointelegraph, 17 Feb. 2023, https:\/\/cointelegraph.com\/news\/binance-mints-50m-trueusd-days-after-paxos-ordered-stop-issuing-busd<\/a><\/a><\/p>\n

5. <\/span>“SEC Clampdown Has Crypto Space Abuzz, Pantera Capital Says We’re in Bull Market, and Much More \u2014 Week in …” Bitcoin News, 19 Feb. 2023, https:\/\/news.bitcoin.com\/sec-clampdown-has-crypto-space-abuzz-pantera-capital-says-were-in-bull-market-and-much-more-week-in-review<\/a><\/a><\/p>\n

6. <\/span>“Crypto firm Paxos to face SEC charges, ordered to stop minting Binance stablecoin” CNBC, 13 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/13\/paxos-ordered-to-cease-minting-binance-stablecoin-by-new-york-regulator.html<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

On February 21, Paxos will cease issuing new Binance USD (BUSD) tokens as directed by the New York Department of Financial Services.[0]<\/a><\/sup> This decision comes as the Securities & Exchange Commission (SEC) is considering taking action against the Paxos-issued cryptocurrency, alleging that it is an unregistered security.<\/p>\n

Paxos ensures that BUSD tokens issued by Paxos Trust are always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts.[1]<\/a><\/sup> All funds are safe and fully covered by reserves in their banks.[2]<\/a><\/sup> In addition, Paxos has committed to continue supporting BUSD tokens and will remain redeemable to onboarded customers through at least February 2024.[2]<\/a><\/sup> Customers have the option to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP) \u2013 another regulated US dollar-backed stablecoin issued by Paxos Trust.[3]<\/a><\/sup><\/p>\n

In response to this news, Binance has minted nearly $50 million worth of TrueUSD (TUSD).[4]<\/a><\/sup> This stablecoin is pegged to the US dollar, and is the sixth largest stablecoin in the market with a circulation of $973 million.[2]<\/a><\/sup> Additionally, Binance CEO Changpeng Zhao (CZ) has warned of \u201cprofound impacts\u201d on the crypto industry if BUSD is ruled as a security.[5]<\/a><\/sup><\/p>\n

This clampdown on the digital assets sector follows the SEC\u2019s enforcement action against Kraken \u2013 another crypto exchange \u2013 for alleged unregistered offering and sale, in connection with Kraken\u2019s crypto staking platform. In response, Binance briefly halted US dollar transfers.[3]<\/a><\/sup><\/p>\n

The SEC\u2019s Wells notice to Paxos suggests that the regulator is of the view that BUSD is a security and that Paxos should have registered the offering of BUSD under the federal securities laws.[6]<\/a><\/sup> However, Paxos has stated that it \u201ccategorically disagrees\u201d with the SEC on this matter and is \u201cprepared to vigorously litigate if necessary.<\/p>\n

0. <\/span>“Crypto Takedown Explained” The Defiant – DeFi News, 16 Feb. 2023, https:\/\/thedefiant.io\/crypto-takedown-explained<\/a><\/a><\/p>\n

1. <\/span>“Paxos Will Halt Minting New BUSD Tokens” PR Newswire, 13 Feb. 2023, https:\/\/www.prnewswire.com\/news-releases\/paxos-will-halt-minting-new-busd-tokens-301744964.html<\/a><\/a><\/p>\n

2. <\/span>“Stablecoin issuer Paxos ordered to halt creation for Binance USD” AOL, 13 Feb. 2023, https:\/\/www.aol.com\/stablecoin-issuer-paxos-ordered-halt-134410690.html<\/a><\/a><\/p>\n

3. <\/span>“US regulator orders crypto firm to stop minting Binance stablecoin” CNN, 15 Feb. 2023, https:\/\/www.cnn.com\/2023\/02\/14\/investing\/paxos-binance-busd-halt-order-us-intl-hnk\/index.html<\/a><\/a><\/p>\n

4. <\/span>“Binance mints 50M TrueUSD days after Paxos ordered stop issuing BUSD” Cointelegraph, 17 Feb. 2023, https:\/\/cointelegraph.com\/news\/binance-mints-50m-trueusd-days-after-paxos-ordered-stop-issuing-busd<\/a><\/a><\/p>\n

5. <\/span>“SEC Clampdown Has Crypto Space Abuzz, Pantera Capital Says We’re in Bull Market, and Much More \u2014 Week in …” Bitcoin News, 19 Feb. 2023, https:\/\/news.bitcoin.com\/sec-clampdown-has-crypto-space-abuzz-pantera-capital-says-were-in-bull-market-and-much-more-week-in-review<\/a><\/a><\/p>\n

6. <\/span>“Crypto firm Paxos to face SEC charges, ordered to stop minting Binance stablecoin” CNBC, 13 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/13\/paxos-ordered-to-cease-minting-binance-stablecoin-by-new-york-regulator.html<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":1264,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1265"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=1265"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1265\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/1264"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=1265"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=1265"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=1265"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}