TheCryptoUpdates
CryptoCryptocurrency NewsGeneral NewsNews

SEC takes Legal Action against Paxos over Binance Stablecoin 

SEC takes Legal Action against Paxos over Binance Stablecoin 

The Securities and Exchange Commission (SEC) is reportedly planning to file a lawsuit against Paxos Trust Company, a New York-based crypto asset trust firm, over its role in the issuance of a stablecoin backed by Binance, according to a report from the Wall Street Journal.

The SEC has been investigating the relationship between Paxos and Binance, the world’s largest cryptocurrency exchange, as part of a broader crackdown on the crypto industry. The agency has expressed concern that the stablecoin issued by Paxos, which is pegged to the U.S. dollar, could be classified as a unregistered security under U.S. law.

The Potential Consequences of Classifying the Stablecoin as a Security

If the SEC were to classify the stablecoin as a security, it would be subject to strict regulatory oversight, which could undermine its usefulness as a means of exchange in the crypto market. It could also set a precedent for other stablecoin issuers, which may be forced to comply with onerous reporting and disclosure requirements.

Paxos, which is regulated by the New York State Department of Financial Services, has stated that it has been working closely with regulators to ensure that its stablecoin complies with all applicable laws and regulations.

Increased Regulatory Scrutiny of the Crypto Industry

The news of the SEC’s impending lawsuit comes as U.S. authorities are scrutinizing the crypto industry, which has grown rapidly in recent years. Regulators are concerned that the lack of oversight and transparency in the sector could lead to fraud and other illegal activities and are taking steps to ensure that crypto companies are operating within the law.

***

Related Articles

Creditors Claim FTX Was Silent For Exchange Reboot Plans

Mridul Srivastava

The struggle & success story of the legend of the music industry – Emmanuel Almonor

Kesarwani

Report: BitMEX Research says ICO Tokens Lost 54% of $24 Bln Value

Kesarwani