Paxos declared that it will discuss the situation with the American securities regulator and that, if required, it will litigate vehemently.
The US securities regulator’s portrayal of Binance USD has drawn criticism from Paxos Trust Company, which has publicly stated that it “categorically disagrees” with it (BUSD). The issuer of BUSD acknowledged receiving a Wells notice from the US Securities and Exchange Commission on February 13 regarding BUSD and its alleged failure to register the offering under federal securities laws. In response to recent reports, this was said.
“Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws,” Paxos said.
The company stated that “there are unequivocally no other allegations against Paxos,” adding that it had received the warning on February 3. We will discuss this matter with the SEC staff, and if required, we are ready to litigate tenaciously.
The New York Department of Financial Services (NYDFS) instructed Paxos to stop issuing BUSD on February 13. With effect from February 21, Paxos will stop producing new BUSD coins, the company tweeted on February 13.
However, according to Paxos, BUSD will continue to be fully maintained and redeemable for users who have already signed up through at least February 2024.
”New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust,” Paxos said.
Prior to its crackdown on BUSD, the New York State Department of Financial Services, or NYDFS, apparently received a complaint about Binance’s reserves from stablecoin issuer Circle.
Although issuer Paxos has been told to stop minting the stablecoin by the U.S. SEC and New York regulators, Binance CEO Changpeng “CZ” Zhao says the exchange will continue to support BUSD.