Paxos is engaged in ‘constructive discussions’ with SEC: Report

Paxos stablecoin issuer reportedly discussed the Binance USD (BUSD) stablecoin with the U.S. Securities and Exchange Commission following Wells’ notice from the financial regulator.

According to a February 21 Reuters report, Paxos CEO Charles Cascarilla said the firm was “in constructive talks” with the SEC and continued to speak in private. The report followed the stablecoin issuer facing legal action from the SEC in which the regulator claimed BUSD was a non-registered security.

Cascarilla reportedly said that Paxos would consider defending its position that BUSD is not a security in court. On February 13, the New York City Department of Financial Services – Paxos is licensed in the US state – ordered the company to stop issuing BUSD. The firm has announced that it will stop issuing the stablecoin from February 21st.

An SEC spokesperson previously told Cryptooshala that he would not comment on “the presence or absence of a possible investigation” with Paxos, but the regulator’s move was the latest in a series of cryptocurrency enforcement actions. The SEC announced it had reached an agreement with Kraken on Feb. 9 in which the firm agreed to stop offering services or staking programs to U.S. customers and pay out $30 million.

SEC lawsuit against Paxos over BUSD baffles the crypto community

The NYDFS investigation into Paxos may have been linked to the Circle report, which reportedly filed a complaint with the government regulator regarding Binance’s reserves. Following the BUSD news, Binance data showed that there was a spike in withdrawals between February 12 and 13, roughly $2.7 billion.

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