The New York Department of Financial Services has handed a blow to the cryptocurrency industry by ordering Paxos Trust Co. to cease issuing one of the biggest dollar-pegged cryptocurrencies.
The government is concentrating on providing better control of the business as the crackdown on the sector intensifies.
Paxos, which controls the BUSD token for Binance, has been ordered to cease producing further tokens. Nevertheless, they will continue to supervise product redemptions, according to a Binance statement.
The announcement comes at a time when SEC head Gary Gensler has said that the agency would focus on enhancing its oversight of the staking sector. Investors who hold assets on centralized staking platforms are alarmed by this revelation, which is why some proponents of decentralization see Gensler’s ambition to regulate the sector as “bullish” for decentralized staking.
Concerns about the governmental crackdown on the bitcoin industry are mounting among market players. The industry’s unpredictability has prompted many to doubt the viability of cryptocurrencies, and it remains to be seen what more regulatory moves may be taken in the coming months. Many are confident that cryptocurrencies will continue to play a key part in the financial landscape, and that the current crackdown will only serve to boost the sector in the long run.
Recently, the Securities and Exchange Commission accused Payward Ventures, Inc. and Payward Trading Ltd., also known as Kraken, of failing to register its offering and sale of the staking-as-a-service program for its crypto assets. The scheme required investors to submit their crypto holdings to Kraken for staking in exchange for yearly profits of up to 21%, as claimed.
Also Read: Coinbase’s CEO is willing to litigate the US’s position on staking in court
