Last week Paxos, the issuer of Binance’s BUSD stablecoin, was targeted by the US Security and Exchange Commission (SEC). BUSD was said to be an unregistered security and Paxos subsequently stopped issuing new BUSD. The CEO of the company has announced engaged in constructive discussions with the SEC and has severed all ties with Binance.
Paxos in talks with SEC
According to Paxos CEO Charles Cascarilla, the end of the relationship with Binance has nothing to do with the SEC’s allegations. “The market has changed and the relationship with Binance is no longer aligned with our strategic priorities,” he said.
Paxos, in a response to the allegations, indicated its complete disagreement with the content of these allegations by the SEC. Now, however, the two parties seem to be talking behind the scenes to reach a compromise. However, a battle in court has not yet been ruled out.
“We look forward to conducting these conversations in private. If necessary, we will defend our position in court.”
Thus Cascarilla. So Paxos is cutting ties with Binance, but they are not dropping BUSD just yet. Paxos indicates that it will take responsibility until next year and protect the owners of the stablecoin.
“We remain fully focused on representing BUSD holders and we will protect them. Paxos will support BUSD until February 2024 and maintain the highest security requirements in the stablecoin market.”
SEC shakes stablecoins
The SEC appears to be on a warpath targeting the stablecoin industry. BUSD’s market cap has plummeted since the start of the hoopla. Paxos is actively acquiring a large part of the stablecoin burn. The number two stablecoin, USDC, also seemed to falter around all the stablecoin stress. The most popular and strongest stablecoin, Tether’s USDT, seems to be benefiting so far and garnering a larger market share.
