SEC Drops Paxos Investigation: Major Win for Stablecoins

Published: Jul 11, 2024
Written By:
Vignesh Karunanidhi
Milk Road Writer

The Securities and Exchange Commission (SEC) has decided to conclude its investigation into Paxos, according to a report by Fortune.

This decision comes more than a year after the commission issued a Wells notice to Paxos.

Key points:

  • SEC ends probe into Paxos without recommending enforcement action.
  • Paxos expresses relief and anticipates accelerated enterprise partnerships.
  • Move may provide more regulatory clarity for the stablecoin sector.

Jorge Tenreiro, acting chief of the SEC’s crypto assets and cyber unit, informed Paxos of the decision not to recommend enforcement action on July 9.  

Also read: US Inflation Drops To 3%, Crypto Market Turns Green

Paxos expresses relief as the probe ends

Walter Hessert, head of strategy at Paxos, expressed relief following the news. “The termination of this investigation formally is an enormous relief for us,” said Hessert.

This development could have far-reaching implications for the stablecoin sector. With major players like PayPal and VanEck in the space, the SEC’s decision may provide much-needed regulatory clarity.  

The SEC had initially argued that BUSD was an investment contract and therefore a security. However, as the investigation has concluded, it technically means that BUSD is no longer a security in the eyes of the SEC.

Also read: Compound Finance Website Hijacked: Users Warned Of Phishing Threat

This is indeed a big win for the stablecoin industry, considering the SEC’s tough stance on cryptocurrencies in general. BUSD was launched by Paxos in 2019 in collaboration with Binance.

According to CoinGecko data, BUSD currently has a market cap of $69.8 million.

Vignesh Karunanidhi

Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.

Vignesh Karunanidhi
Milk Road Writer
Vignesh has been a seasoned professional in the crypto space since 2017. He has been writing for over 6 years and specializes in writing and editing various types of crypto content, including news articles, long-form pieces, and blog posts, all focused on sharing the beauty of blockchain and crypto.