{"id":714,"date":"2023-02-13T13:03:02","date_gmt":"2023-02-13T18:03:02","guid":{"rendered":"https:\/\/embarrdowns.com\/paxos-under-intense-regulatory-scrutiny-binance-ceo-cz-weighs-in\/"},"modified":"2023-02-13T13:03:02","modified_gmt":"2023-02-13T18:03:02","slug":"paxos-under-intense-regulatory-scrutiny-binance-ceo-cz-weighs-in","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/paxos-under-intense-regulatory-scrutiny-binance-ceo-cz-weighs-in\/","title":{"rendered":"Paxos under Intense Regulatory Scrutiny, Binance CEO CZ Weighs In"},"content":{"rendered":"

US-based crypto trust company Paxos has recently been the subject of intense scrutiny from regulators.[0]<\/a><\/sup> The New York Department of Financial Services (NYDFS) has ordered the firm to halt the minting of its Binance USD (BUSD) stablecoin, while the U.S. Securities and Exchange Commission (SEC) has issued a Wells Notice to the firm, alleging that BUSD is an unregistered security.<\/p>\n

The NYDFS directed Paxos to halt the issuance of new BUSD tokens from February 21, 2021.[1]<\/a><\/sup> The firm is set to continue managing BUSD dollar reserves, assuring all stablecoins are and \u201calways will be\u201d backed 1:1 with US dollar-denominated reserves, kept in bankruptcy remote accounts.[1]<\/a><\/sup><\/p>\n

PayPal Holdings (NASDAQ:PYPL) has reportedly put its own stablecoin work on hold due to the investigation of Paxos.[2]<\/a><\/sup> The SEC issued the Wells Notice, giving Paxos the opportunity to reply in writing and explain why a lawsuit should not be filed.[3]<\/a><\/sup><\/p>\n

BUSD is the third-largest stablecoin on the market and the seventh-largest crypto asset in existence, with a market cap of $16.15 billion at the time of writing.[0]<\/a><\/sup> It was created in partnership with Binance in September 2019 and is 1:1 dollar-pegged.<\/p>\n

Binance CEO Changpeng Zhao (CZ) commented on the situation, saying that BUSD is a \u201cPaxos issued and owned product\u201d and that Paxos is regulated by the NYDFS. He added that if BUSD is ruled a security, it will have a \u201cprofound impact\u201d on how the crypto industry will develop in the jurisdictions where it is ruled as such.[4]<\/a><\/sup> He noted that users may migrate to other stablecoins over time, and that Binance will \u201cmake product adjustments accordingly.\u201d[5]<\/a><\/sup><\/p>\n

The SEC also issued a $30 million settlement to the U.S.-based crypto exchange Kraken for its staking product, which the regulator alleged to be an illegal sale of securities.[6]<\/a><\/sup> The exchange did not admit to any wrongdoing but agreed to pay the fine and discontinue its products in the U.S.<\/p>\n

Paxos maintains strong regulatory capital to protect customers and a strong corporate balance sheet.[1]<\/a><\/sup> The firm remains committed to becoming the global leader in the blockchain tokenization infrastructure relied upon by global enterprises.[7]<\/a><\/sup><\/p>\n

0. <\/span>“SEC may sue BUSD stablecoin issuer Paxos, WSJ reports” Forkast News, 13 Feb. 2023, https:\/\/forkast.news\/headlines\/sec-sue-busd-stablecoin-paxos-binance\/<\/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>“PayPal delays stablecoin work as key partner under NYDFS probe (NASDAQ:PYPL)” Seeking Alpha, 10 Feb. 2023, https:\/\/seekingalpha.com\/news\/3934992-paypal-delays-stablecoin-work-as-key-partner-under-nydfs-probe<\/a><\/a><\/p>\n

3. <\/span>“Binance’s Native Token, BNB, Price Impacted by Recent FUD on Stablecoin: Details” U.Today, 13 Feb. 2023, https:\/\/u.today\/binances-native-token-bnb-price-impacted-by-recent-fud-on-stablecoin-details<\/a><\/a><\/p>\n

4. <\/span>“Binance CEO says declaring BUSD a security will ‘profoundly impact’ crypto progress” Finbold – Finance in Bold, 13 Feb. 2023, https:\/\/finbold.com\/binance-ceo-says-declaring-busd-a-security-will-profoundly-impact-crypto-progress\/<\/a><\/a><\/p>\n

5. <\/span>“bUSD to be Phased Out, SEC Gives Notice” Trustnodes, 13 Feb. 2023, https:\/\/www.trustnodes.com\/2023\/02\/13\/busd-to-be-phased-out-sec-gives-notice<\/a><\/a><\/p>\n

6. <\/span>“PayPal Pauses Stablecoin Project Amid Paxos Regulatory Scrutiny” PYMNTS.com, 12 Feb. 2023, https:\/\/www.pymnts.com\/cryptocurrency\/2023\/paypal-puts-stablecoin-on-hold-amid-closer-regulatory-scrutiny<\/a><\/a><\/p>\n

7. <\/span>“BUSD is dead, long live USDT” Protos, 13 Feb. 2023, https:\/\/protos.com\/busd-is-dead-long-live-usdt\/<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

US-based crypto trust company Paxos has recently been the subject of intense scrutiny from regulators.[0]<\/a><\/sup> The New York Department of Financial Services (NYDFS) has ordered the firm to halt the minting of its Binance USD (BUSD) stablecoin, while the U.S. Securities and Exchange Commission (SEC) has issued a Wells Notice to the firm, alleging that BUSD is an unregistered security.<\/p>\n

The NYDFS directed Paxos to halt the issuance of new BUSD tokens from February 21, 2021.[1]<\/a><\/sup> The firm is set to continue managing BUSD dollar reserves, assuring all stablecoins are and \u201calways will be\u201d backed 1:1 with US dollar-denominated reserves, kept in bankruptcy remote accounts.[1]<\/a><\/sup><\/p>\n

PayPal Holdings (NASDAQ:PYPL) has reportedly put its own stablecoin work on hold due to the investigation of Paxos.[2]<\/a><\/sup> The SEC issued the Wells Notice, giving Paxos the opportunity to reply in writing and explain why a lawsuit should not be filed.[3]<\/a><\/sup><\/p>\n

BUSD is the third-largest stablecoin on the market and the seventh-largest crypto asset in existence, with a market cap of $16.15 billion at the time of writing.[0]<\/a><\/sup> It was created in partnership with Binance in September 2019 and is 1:1 dollar-pegged.<\/p>\n

Binance CEO Changpeng Zhao (CZ) commented on the situation, saying that BUSD is a \u201cPaxos issued and owned product\u201d and that Paxos is regulated by the NYDFS. He added that if BUSD is ruled a security, it will have a \u201cprofound impact\u201d on how the crypto industry will develop in the jurisdictions where it is ruled as such.[4]<\/a><\/sup> He noted that users may migrate to other stablecoins over time, and that Binance will \u201cmake product adjustments accordingly.\u201d[5]<\/a><\/sup><\/p>\n

The SEC also issued a $30 million settlement to the U.S.-based crypto exchange Kraken for its staking product, which the regulator alleged to be an illegal sale of securities.[6]<\/a><\/sup> The exchange did not admit to any wrongdoing but agreed to pay the fine and discontinue its products in the U.S.<\/p>\n

Paxos maintains strong regulatory capital to protect customers and a strong corporate balance sheet.[1]<\/a><\/sup> The firm remains committed to becoming the global leader in the blockchain tokenization infrastructure relied upon by global enterprises.[7]<\/a><\/sup><\/p>\n

0. <\/span>“SEC may sue BUSD stablecoin issuer Paxos, WSJ reports” Forkast News, 13 Feb. 2023, https:\/\/forkast.news\/headlines\/sec-sue-busd-stablecoin-paxos-binance\/<\/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>“PayPal delays stablecoin work as key partner under NYDFS probe (NASDAQ:PYPL)” Seeking Alpha, 10 Feb. 2023, https:\/\/seekingalpha.com\/news\/3934992-paypal-delays-stablecoin-work-as-key-partner-under-nydfs-probe<\/a><\/a><\/p>\n

3. <\/span>“Binance’s Native Token, BNB, Price Impacted by Recent FUD on Stablecoin: Details” U.Today, 13 Feb. 2023, https:\/\/u.today\/binances-native-token-bnb-price-impacted-by-recent-fud-on-stablecoin-details<\/a><\/a><\/p>\n

4. <\/span>“Binance CEO says declaring BUSD a security will ‘profoundly impact’ crypto progress” Finbold – Finance in Bold, 13 Feb. 2023, https:\/\/finbold.com\/binance-ceo-says-declaring-busd-a-security-will-profoundly-impact-crypto-progress\/<\/a><\/a><\/p>\n

5. <\/span>“bUSD to be Phased Out, SEC Gives Notice” Trustnodes, 13 Feb. 2023, https:\/\/www.trustnodes.com\/2023\/02\/13\/busd-to-be-phased-out-sec-gives-notice<\/a><\/a><\/p>\n

6. <\/span>“PayPal Pauses Stablecoin Project Amid Paxos Regulatory Scrutiny” PYMNTS.com, 12 Feb. 2023, https:\/\/www.pymnts.com\/cryptocurrency\/2023\/paypal-puts-stablecoin-on-hold-amid-closer-regulatory-scrutiny<\/a><\/a><\/p>\n

7. <\/span>“BUSD is dead, long live USDT” Protos, 13 Feb. 2023, https:\/\/protos.com\/busd-is-dead-long-live-usdt\/<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":713,"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\/714"}],"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=714"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/714\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/713"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}