Paxos Faces Lawsuit over Binance USD

A report from the Wall Street Journal (WSJ) on February 12 revealed that the United States Securities and Exchange Commission (SEC) plans to sue technology firm Paxos Trust Co. for violation of investor protection laws in relation to the issuance of its Binance USD (BUSD) tokens.

The SEC notice alleges that that Binance USD is not a registered security, and that Paxos has 30 days to respond to the SEC-issued Wells Notice via a legal brief commonly referred to as a Wells Submission. A Paxos spokesperson said that Paxos is regulated by the New York Department of Financial Services, and that BUSD is a “1 to 1 backed stablecoin.”

A Binance representative said that “Stablecoins are a critical safety net for investors seeking refuge from volatile markets and limiting their access would directly harm millions of people across the globe,” and that the crypto exchange will “continue to monitor the situation.”

Sources:

https://cointelegraph.com/news/stablecoin-issuer-paxos-to-face-sec-lawsuit-over-binance-usd-report

https://cryptonews.com/news/sec-threatens-lawsuit-against-binance-busd-stablecoin-issuer-paxos-whats-going-on.htm

https://www.wsj.com/articles/crypto-firm-paxos-faces-sec-lawsuit-over-binance-usd-token-8031e7a7