worldcoinindex.com
The US Securities and Exchange Commission (SEC) has officially concluded its investigation into Paxos, the stablecoin issuer. On July 9th, Jorge Tenreiro, the head of the SEC’s crypto assets and cyber unit, informed Paxos that no enforcement action would be recommended against the firm. This marks a significant shift from a year ago when Paxos received a Wells Notice from the SEC, indicating potential enforcement over its Binance-partnered stablecoin.
The closure of this investigation is crucial for the BUSD stablecoin, confirming that it is not considered a security. This outcome is a notable victory for both the cryptocurrency market and the firms involved. The SEC, which has faced challenges in its regulatory efforts against the crypto market, has now ended a major legal probe quietly. This follows the CFTC Chairman’s recent statement that 70% to 80% of all cryptocurrencies are not securities.
Paxos and Binance can now breathe a sigh of relief. Walter Hessert, Paxos’ head of strategy, expressed to Fortune that this decision was anticipated and should provide greater market certainty, especially among large enterprises. The stablecoin market has seen significant growth, attracting traditional finance firms like PayPal and VanEck. Such regulatory outcomes are hoped to pave the way for clearer regulations for US-based industry participants.
Paxos and Binance launched the BUSD token in 2019, and it quickly became a leading stablecoin. The SEC’s investigation lasted over a year, but a federal judge's ruling in favor of Binance on June 28th, which determined that BUSD sales were not securities offerings, likely influenced the SEC’s decision to terminate the investigation.