Bitrabo Editorial
The Securities and Exchange Commission (SEC) has decided to end its investigation into Paxos, marking a significant win for stablecoin regulation in the US.
After more than a year since the SEC sent a Wells notice to Paxos regarding the Binance USD (BUSD) stablecoin, the regulator, through Jorge Tenreiro, the acting chief of its crypto assets unit, communicated the decision to drop the probe.
Paxos Celebrates the End of Investigation
According to a Fortune report, Walter Hessert, Paxos’ head of strategy, expressed relief at the closure of the investigation, emphasizing the positive impact this decision will have on market certainty.
Paxos and Binance launched the BUSD stablecoin in September 2019, which despite not overtaking competitors like Tether’s USDT and Circle’s USDC, gained prominence within the Binance ecosystem.
The SEC had alleged that BUSD should be considered a security under the Howey test, a viewpoint Paxos disagreed with, citing BUSD’s full backing by dollar reserves at a 1:1 ratio.
BUSD Confirmed as Non-Security
Despite a year-long investigation that was active until early July, the SEC’s position changed following a court ruling in favor of Binance on June 28, which determined that BUSD’s sale did not constitute a securities offering, resulting in the dismissal of charges.
At the time of reporting, Binance’s BNB token was trading at $532, showing a 1% increase in the past 24 hours.
Image source: DALL-E, chart source: TradingView.com