Home 2023 Paxos will be sued by SEC over Stablecoin

Paxos will be sued by SEC over Stablecoin

by John Heffernan

According to the Wall Street Journal, the US Securities and Exchange Commission (SEC) intends to sue stablecoin issuer Paxos, which is behind the Pax Dollar (USDP) and Binance USD (BUSD) tokens, over the latter stablecoin.

The commission does not comment on the existence or nonexistence of a potential investigation according to an SEC spokesperson.

In the report, the SEC claims that BUSD is an unregistered security. The announcement comes just days after CoinDesk reported that Paxos is being investigated by the New York Department of Financial Services, though the scope of the investigation is unknown.

BUSD is a Binance-branded stablecoin issued by Paxos, a trust company based in New York with a provisional charter from the Office of the Comptroller of the Currency, a federal bank regulator.

Paxos spokespersons did not immediately respond to requests for comment.

The announcement comes just days after the SEC settled charges with crypto exchange Kraken, alleging that its staking services constituted an unregistered securities offering. Under the terms of the settlement, Kraken did not admit or deny the charges, but it did shut down all its US staking programs.

Last month, Binance admitted that it had not always maintained the proper balance to back Binance-Peg BUSD (PBUSD), a wrapped version of BUSD that is backed by BUSD and is offered on non-Ethereum networks. Binance stated that “on occasion in the past, there was a timing mismatch in backing Binance-Peg BUSD with BUSD” after Bloomberg reported that there were issues with how PBUSD’s backing was displayed. In a blog post, the crypto exchange claimed that while there were issues with “publicly viewable data,” user redemptions were unaffected.

About Paxos

Paxos is an algorithm that allows a distributed group of computers (such as a cluster of distributed database nodes) to reach consensus over an asynchronous network. One or more of the computers proposes a value to Paxos in order to reach agreement. When a majority of the computers running Paxos agree on one of the proposed values, consensus is reached.

In general, Paxos chooses a single value from one or more proposed values and then broadcasts that value to all cooperating computers. After running the Paxos algorithm, all of the computers (or database nodes) agree on the proposed value, and the cluster clock advances.

To speak to a professional about Cryptocurrency, contact KXCO.IO.

More News:

Blockchain Bridges: How safe is it?

Rumors that Staking could be Banned in U.S. claims Coinbase CEO

Activist Investor aiming at Big Tech Company: “No One is Immune”

You may also like


Your Trusted Source for Capital Markets & Related News

© 2024 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.