Stable coin emittent Paxos sees itself exposed to the anger of the SEC because of Binance USD
Stable coin emittent Paxos sees itself exposed to the anger of the SEC because of Binance USD
according to reports of February 12, in which "people familiar with the matter" are quoted, the SEC plans to act against Paxos because of the Stablecoin Busd.
The WSJ report says that the financial supervisory authority Paxos sent a letter known as Wells Notice to inform you about possible enforcement measures. The communication of Wells enables companies to respond to the SEC to explain why the authority should not take any legal steps. It is not a final declaration of enforcement.
The SEC raises the same claims as always with crypto companies-it does not sell registered securities, which in its opinion is Busd. In addition, the agency has not yet targeted a large stable coin issuer, but expands its radius of action with this latest salva.
Is Busd a security?
paxos received a partnership with Binance in 2019 to launch the stable coin with stock market brand, which is bound by the dollar, which is today the third largest in the world.
The crypto community suggested that it was a swipe on Binance, since the asset is obviously a stable coin and not a securities.
The sec claims that Busd is a non -registered security and sues his issuer Paxos 🚩
To be considered a securation, the Howey test is used ... I don't think Busd fulfills the criteria, it is a damned stable coin !?
seems to be a shot on Binance rather than anything else. pic.twitter.com/9sauys5gy7
- tedtalksmacro (@tedtalksmacro) 13. February 2023
The Sec did not indicate whether it had a problem with the company that the coined coin or the Listing Busd from Paxos.
Last week, Cryptopotato reported that Paxos was investigated, but the company contested that it was asked to withdraw its application for a national trust in the OCC.
Sec chairman Gary Gensler has previously commented on the stable coins of bank deposits or money market funds, but now he seems to throw them into a pot with securities that resemble corporate shares.
Last week the SEC was hard against octopuses and also accused not of registered securities through his staking services. The US crypto exchange decided on $ 30 million and pulled the plug for its staking products.
industry leaders have warned that the SEC tried to prohibit staking for US small investors what services and trade will push abroad (as FTX was the case).
outlook on the StableCoin ecosystem
The current StableCoin market capitalization is $ 137 billion, which corresponds to 13 % of the total crypto market capitalization.
tether (USDT) and Circle (USDC) dominate the lion's share of the market with a common share of around 80 %.
Binance USD is the third largest stable coin with a circulation of $ 16.1 billion and a market share of $ 12 %. Paxos has its own stablecoin called Pax Dollar (USDP) and, according to Coingecko, has a stock of $ 896 million.
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