Paxos Categorically Rejects that BUSD is a Security According to the SEC

Paxos stated that it will discuss the situation with the American securities regulator and is ready to "vigorously litigate if required."

Source: news.italy24.press

The United States securities regulator's classification of Binance USD as a security is something that Paxos Trust Company "categorically disagrees" with.

The BUSD issuer stated in the Feb. 13 statement that it has received a Wells notice from the US Securities and Exchange Commission regarding BUSD and its alleged failure to register the offering under federal securities laws. This was in response to previous stories.

According to the federal securities laws, BUSD is not a security, hence Paxos emphatically disagrees with the SEC staff on this point.

The company stated that "there are categorically no additional charges against Paxos," adding that it had received the warning on February 3.

We will discuss this matter with the SEC staff and are prepared to defend tenaciously if required, in line with the statement. 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.

Both new and current Paxos clients will be able to exchange their BUSD tokens into Pax Dollar (USDP), a regulated stablecoin also issued by Paxos Trust, or redeem their assets in US dollars.

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.

Despite the fact that the U.S. SEC and New York regulators have ordered issuer Paxos to cease minting the stablecoin, Binance CEO Changpeng "CZ" Zhao said the exchange would continue to support BUSD.

Disclaimer: FAMEEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.