The US Securities and Exchange Commission (SEC) has concluded its investigation into Paxos Trust Company’s Binance USD (BUSD) stablecoin, providing a clear understanding of the regulatory environment for the industry.
Jorge Tenreiro, the interim head of the SEC, notified Paxos that they would not recommend taking legal action, one year after the BUSD stablecoin was identified as a possible target for legal action.
Although there were allegations that BUSD did not fulfill security criteria, Paxos firmly asserted that it was tied at a ratio of 1:1 with reserves valued in U.S dollars. The crypto industry was apprehensive about the protracted probe, which impeded Paxos’ capacity to enter into new agreements.
Binance was exonerated by a federal court, prompting the SEC to cease its investigation. The action pertaining to the sale of BUSD was dismissed on June 28, suggesting that the sale of BUSD did not qualify as a securities offering.
Walter Hessert, the head of strategy at Paxos, felt a sense of satisfaction when the investigation concluded. He stated that the market will become more transparent and negotiations with major corporations such as PayPal could proceed more expeditiously.
