BUSD Causes Controversy As Paxos Gets Sued By The SEC
The United States SEC plans to sue stablecoin issuer Paxos, the institution behind the USDP and BUSD tokens, over the latter stablecoin. According to an SEC spokesperson, the agency can neither confirm nor deny the possibility of an in-depth investigation as of this time.
Nevertheless, the SEC claims that BUSD is an unregistered security. The announcement comes just days after it was reported that Paxos is being investigated by the New York Department of Financial Services, although the scope of the investigation remains unknown for now.
After the announcement by the SEC, Paxos stated that it would suspend the production of new BUSD tokens for the time being. BUSD is a stablecoin completely owned and managed by Paxos, according to a Binance spokesperson.
As a result, the BUSD market cap shall continue to fall over time. Meanwhile, Paxos would keep supporting the product, manage redemptions, and provide additional information as needed. Paxos also assured that the funds are secure and covered by bank reserves.
In other news, the SEC recently settled charges with Kraken, alleging that the staking services provided by the crypto exchange constituted an unregistered securities offering. Under the terms of the settlement, Kraken did not deny nor admit to the charges, however the decision was made to cease operations for all of its US staking programs.
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