SEC to Sue Crypto Trust Co. Paxos Over Binary Stablecoin: WJ

According to the Wall Street Journal, Sunday’s report by the U.S. Securities and Exchange Commission (SEC), Paxos, the stablecoin-issuer Paxos (USDP) and Binance USD(BUSD) tokens will be sued over the latter stablecoin.

A spokesperson for the SEC told Coinesk that the commission doesn’t comment on whether or not there is an investigation.

According to the SEC, BUSD is an unregistered security. According to the report. This news comes just days after CoinDesk reported that Paxos was under investigation by New York Department of Financial Services. However, the scope of NYDFS’ investigation is not clear.

BUSD is a Binance-branded stablecoin that Paxos issued. Paxos is a New York-regulated trust firm and also holds a provisional charter from the Office of the Comptroller of the Currency. This federal bank regulator regulates banks.

Spokespeople from Paxos didn’t immediately respond to requests for comment.

The SEC has settled the charges against Kraken, a crypto exchange. It alleged that Kraken’s staking services were offering unregistered securities. The settlement did not allow Kraken to admit or deny the charges, but it did close all its U.S. stake programs.

Binance Last month acknowledged It had not maintained the correct balance to back Binance Peg BUSD (PBUSD), which is a wrapped version BUSD that is offered on non-Ethereum networks and that is backed with BUSD. Bloomberg reported that there had been issues with PBUSD’s backing. Binance stated that “on occasion in past, there was a timing error in backing Binance Peg BUSD with BUSD.” In a blog post, the crypto exchange stated that although there were problems in “the publicly visible data”, user redemptions were unaffected.

UPDATE: February 13, 2013, 0:35 AM. Updates with Binance blog posts from January in the final paragraph.

By David Warsh

David Warsh is a leading expert in the field of cryptocurrency and blockchain technology. With over a decade of experience in the industry, he has a deep understanding of the intricacies of digital currencies and the potential they hold for revolutionizing various industries.