SEC Ends Investigation Into Stablecoin Issuer Paxos

Joshua Ramos
Source – Paxos

The US Securities and Exchange Commission (SEC) has officially ended its ongoing investigation into stablecoin issuer Paxos. Indeed, the agency’s chief of crypto assets and cyber unit, Jorge Tenreiro, informed the issuer on July 9th that he was not recommending enforcement action on the firm.

A year ago, Paxos received a Wells Notice from the SEC signaling enforcement action over its partnered stablecoin with Binance. However, the end of the investigation is important to that BUSD asset. Specifically, it clarifies the token is not a security.

Also Read: Paxos to Cut 20% of its Workforce

SEC Ends Paxos Investigation, Declares BUSD a Non-Security

Amid its ongoing battle with the crypto market, the SEC has found itself on the losing side. After the CFTC Chairman recently said 70% to 80% of all cryptocurrencies are not securities, the agency has quietly ended a rather important legal probe.

Indeed, the SEC has ended its investigation into stablecoin issuer Paxos. Moreover, it declares Binance’s BUSD stablecoin as not a security. The development is certainly a massive win for both crypto, and the firms involved.

Also Read: Bitcoin & Ethereum Ruled as Commodities in Illinois, CFTC Chair Says

“The termination of this investigation formally is an enormous relief for us,” Pasox head of strategy, Walter Hessert told Fortune. “It’s what we expected all along, and it really should create, hopefully, more certainty in the market among what we see as a growing number of large enterprises.”

The stablecoin market has grown significantly in recent months. Notable traditional finance firms like PayPal and VanEck have entered the space. There is hope that these kinds of outcomes can make way for more regulatory clarity for the US-based industry participants.

Paxos and Binance first began issuing the BUSD token in 2019. It quickly became one of the market’s most prominent offerings. The investigation into the issuer lasted for more than a year. A recent federal judge ruling in favor of Binance on June 28th may have been the basis for the shift from the SEC. That judgment ruled that BUSD sales did not constitute a securities offering.