SEC Approves Paxos as Crypto Clearing Agency
BITmarkets Team
May 30, 2026
The company said on Thursday that its subsidiary, Paxos Securities Settlement Company, is now authorized to provide clearing and settlement services as a central securities depository in the United States. According to Paxos, the approval represents an important step in the ongoing convergence of blockchain technology and traditional financial markets.
Clearing agencies play a key role in financial markets by ensuring that securities transactions are properly matched, verified and settled. Rather than trading directly with one another, buyers and sellers rely on clearing and settlement providers to facilitate the exchange of securities and funds.
The registration could help reduce barriers for banks, brokerages and other financial institutions seeking to build blockchain-based market infrastructure within a regulated framework.
Seven-year regulatory effort leads to approval
Paxos’ approval follows years of collaboration with regulators. In October 2019, the SEC issued a no-action letter allowing the company to test a blockchain-based settlement platform for US equities. The pilot program officially launched in February 2020.
According to Paxos, the initiative demonstrated that blockchain-powered post-trade infrastructure could support same-day settlement, lower operational costs and improve efficiency while remaining fully compliant with regulatory requirements.
Paxos co-founder and CEO Charles Cascarilla said: “Our clearing agency registration is the result of seven years of work with the SEC, beginning with our No-Action Letter in 2019 and the settlement pilot we operated with some of the world's largest and most sophisticated financial institutions.” The company is also known for issuing several digital assets and stablecoins, including PayPal USD (PYUSD), Global Dollar and Pax Gold.
Regulatory relationship evolved after BUSD investigation
Despite the latest approval, Paxos has previously faced regulatory scrutiny in the United States. During the tenure of former SEC Chair Gary Gensler, the company received a Wells Notice in 2023 regarding the issuance of Binance USD, a stablecoin associated with crypto exchange Binance.
At the time, the SEC indicated it was considering enforcement action after determining that BUSD could be classified as an unregistered security. Around the same period, the New York Department of Financial Services instructed Paxos to halt the minting of new BUSD tokens.
However, the regulatory situation later shifted. The SEC formally closed its investigation in 2024 and issued a termination notice confirming that it would not pursue enforcement action against the company. Paxos also reached a $48.5 million settlement with NYDFS in August 2025 related to compliance matters involving Binance and BUSD.
The latest SEC approval marks a significant milestone for Paxos and could further accelerate the adoption of blockchain-based infrastructure within traditional securities markets.
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