Paxos emerges victorious in SEC investigation of BUSD stablecoin, no enforcement action taken

Paxos recently announced a significant victory in the investigation conducted by the U.S. Securities and Exchange Commission (SEC). On July 9, 2024, Paxos received formal closure notification from the SEC, stating that the regulatory body would not recommend enforcement action against Paxos Trust Company in its investigation of the Binance USD (BUSD) stablecoin.

Binance faces repercussions? Judge approves most SEC allegations, only BUSD and Earn services not considered investment contracts.

Last year, the SEC investigated Binance's stablecoin BUSD.

In February 2023, Paxos received a Wells notice from the SEC regarding a securities-related investigation, which typically indicates that SEC staff have concluded there are grounds for enforcement action. However, Paxos argued that its USD-backed stablecoin does not fall under the definition of a security under federal securities laws. The SEC later ended the investigation without taking any enforcement action.

Paxos: Positive Impact on Stablecoins from Investigation Outcome

Paxos believes that the conclusion of the SEC investigation is expected to have a profound impact on the global adoption of stablecoins. This development is anticipated to catalyze a new wave of stablecoin adoption, especially those with robust consumer protection measures. According to Paxos, well-designed stablecoins have the potential to transform the financial system, particularly in payment, settlement, and remittance applications, making them more stable, accessible, and transparent.