Paxos does not consider the stablecoin Binance USD (BUSD) to be a security.
Paxos said that it “categorically disagrees” with the SEC’s classification of Binance USD (BUSD) as a security.
The stablecoin issuer reported receiving an SEC Wells notice over BUSD after the agency claimed Paxos listed the stablecoin as an unregistered security.
The business added in an emailed statement to The Block, “We will engage with the SEC staff on this matter and are prepared to fight strongly if necessary.” “To be quite clear, there are no further claims against Paxos,”
In response to a directive from the New York Department of Financial Services, Paxos will cease issuing BUSD.
Paxos, in a statement, said, “it has always emphasised the protection of its client’s assets.” All Paxos-issued BUSD are 100% collateralized by reserves denominated in US dollars that are stored in separate, bankruptcy-proof accounts.”
Paxo will cease creating new BUSD stablecoins on February 21, although redemptions will be permitted until at least February 2024, according to the business.
“BUSD is an entirely Paxos-owned and controlled stablecoin. Consequently, BUSD market cap will continue to decline over time “a Binance official previously told The Block. Paxos will continue to serve the product, monitor redemptions, and provide needed extra information.
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