Paxos in “Constructive Discussions” With SEC Over BUSD
- Stablecoin issuer Paxos has engaged the SEC in “constructive discussions” over its allegation that BUSD is a security, ready to defend its position in litigation.
- The company also revealed it will be ending its relationship with Binance, but noted that the decision was separate from the NYDFS and SEC investigations.
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Stablecoin issuer Paxos is continuing its discussion with the U.S. Securities and Exchange Commission (SEC) over the Binance USD (BUSD) stablecoin and the Wells notice, Reuters reported on 21 February.
The publication cited an internal email from Paxos’ CEO Chrales Cascarilla, who said the company is currently “engaged in constructive discussions” with the SEC over BUSD, and that it would continue to speak to the regulator in private. The executive further noted that Paxos continues to believe the the stablecoin should not be classified as security, and if necessary, “defend our position in litigation”.
Last week the company revealed it was facing a lawsuit from the SEC, which had sent it a Wells notice — a letter that informs companies of planned enforcement action — alleging that the BUSD stablecoin was an unregistered security. At the time, Paxos said it “categorically disagrees” with the SEC, and that it was prepared to “vigorously litigate” if necessary. The company had said in a press release:
“BUSD issued by Paxos is always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary.”
In a separate announcement, Paxos said it would be halting the issuance of new BUSD starting 21 February at the request of the New York Department of Financial Services (NYDFS). The company will, however, continue to support the stablecoin, and users will be able to redeem their funds in either Pax Dollar (USDP) or USD. Paxos also revealed it will be ending its relationship with the Binance crypto exchange, though Cascarilla noted that this decision was separate from the NYDFS and SEC investigations.
- The popular crypto exchange has decided to sell its business in Russia to CommEX, a crypto exchange business that was officially launched on Tuesday.
- Binance noted that it will fully exit the Russian market, and have no ongoing revenue split or any option to buy back shares in the business.
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- The company said it will be suspending its crypto-backed debit card service in the Middle East on 25 August, and in Latin America by 21 September.
- Although no reason was given for the decision, the company noted that “less than 1% of users” in those regions will be affected by the change.
- A spokesperson said the change was due to the “changing market and user needs”, and that Binance will now be refocusing its resources on its main products and long-term goals.
- Launched in March 2022, Binance Connect helped crypto businesses connect with the traditional finance system, and supported 50 cryptocurrencies and networks such as Visa and Mastercard.