The US Securities and Exchange Commission (SEC) plans to sue Paxos for violating the law.
While the recovery process is observed in the crypto money market, the legal processes do not stop. After the disasters of the past year, many regulators have seen activity in the new year. One of these regulators, the SEC, is working hard to rally the crypto industry. Finally, the SEC has put the Paxos and BUSD relationship on its radar. The SEC is preparing to sue Paxos.
SEC Makes Action Plan on BUSD and Paxos
The U.S. Securities and Exchange Commission (SEC) is preparing to sue Paxos because it believes it violates investor protection laws.
An official on the SEC side also sent Paxos a letter that the agency uses to notify companies and individuals of possible enforcement action.
The announcement claims that Binance USD (BUSD), a stablecoin issued and listed by Paxos, is an unregistered security.
BUSD, created in partnership with Binance and Paxos, is pegged to the US dollar at a one-to-one rate. The stablecoin, which was launched in 2019, has now entered the SEC’s radar.
According to the SEC statement, it could not be determined whether Paxos is based on any action plans regarding cryptocurrencies, such as issuance or listing.
“Paxos does not comment on any individual matter,” a Paxos spokesperson said.
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