The US Securities and Exchange Commission (SEC) has recently concluded its investigation into stablecoin issuer Paxos without taking any enforcement actions. Paxos announced on July 11 that it received notice of the investigation’s termination on July 9. The SEC confirmed that it would not pursue any enforcement action against Paxos Trust Company regarding the Binance USD (BUSD) stablecoin.
This decision comes after over a year since the SEC issued a Wells notice indicating a potential enforcement action against Paxos over its involvement with the dollar-backed BUSD stablecoin. A federal judge also recently ruled that BUSD sales did not violate securities laws, despite the SEC’s claims.
While the supply of BUSD has significantly decreased, Paxos has consistently maintained that the stablecoin is not a security and has vowed to defend against the SEC’s allegations. The company has issued various regulated digital assets, including PayPal USD (PYUSD), Pax Dollar (USDP), and Pax Gold (PAXG), and holds licenses from financial regulators in the US, Singapore, and the Abu Dhabi Global Market.
Paxos believes that the conclusion of the SEC’s investigation into the BUSD stablecoin will encourage major global enterprises to adopt stablecoins. The company stated that well-designed stablecoins with strong consumer protections, like those issued by Paxos, have the potential to revolutionize the financial system in payment, settlement, and remittance use cases. This technology can make the financial system more stable, accessible, and transparent.
Stablecoins have gained popularity as a practical application of cryptocurrency technology, especially in emerging markets like Nigeria. These assets are typically pegged to the US dollar and offer a stable alternative to volatile cryptocurrencies such as Bitcoin.
Overall, the resolution of the SEC’s investigation into Paxos and the BUSD stablecoin is expected to pave the way for increased adoption of stablecoins by major global enterprises, potentially transforming the financial system and improving accessibility and transparency.