Paxos, the stablecoin issuer, recently announced that it is engaged in “constructive discussions” with the U.S. Securities and Exchange Commission (SEC) regarding the issuance of Binance USD (BUSD), a branded stablecoin product.
The company’s CEO, Charles Cascarilla, stated that they are working with regulators to enhance their standing and expand their Singapore products in consultation with the Monetary Authority of Singapore (MAS).
Last week, Paxos acknowledged receiving a Wells Notice from the SEC, which alleged that the company’s issuance of BUSD may be a violation of federal securities law. However, the notice did not include the company’s own stablecoin product, Pax dollar (USDP).
The company has already announced that it will stop issuing BUSD after receiving a notice from the New York Department of Financial Services, which oversees it.
Cascarilla stated that Paxos is ending its relationship with Binance as the market has evolved, and the Binance relationship no longer aligns with the company’s current strategic priorities.
Since the introduction of BUSD in 2019, Paxos has facilitated more than $2.8 billion in BUSD redemptions with no significant market disruptions.
The SEC has been accelerating its crackdown on crypto companies that it believes are violating federal law. In recent weeks, it settled charges that Kraken’s staking services product was an unregistered securities offering, settled charges with National Basketball Association Hall of Famer Paul Pierce alleging he didn’t disclose being paid to promote a token, and sued Gemini, Genesis, and Terraform Labs.
Despite the challenges, Paxos remains committed to working with regulators towards the publication of their Clearing Agency application, moving their conditional approval into an operationalized and launched National Trust, and expanding their Singapore products in consultation with the MAS.
The company is pursuing any opportunities for productive collaboration with regulators to enhance its standing in the market.