BREAKING: SEC Drops Paxos Probe, Validates BUSD Non-Security Status | Bitcoinist.com



In
what
could
be
a
major
victory
for
stablecoin
issuance
and
regulation
in
the
US,
the
Securities
and
Exchange
Commission
(SEC)
has
decided
to
drop
its
investigation
into
Paxos,
providing
a
major
boost
to
the
stablecoin
sector. 


According
to
a
Fortune
report
on
the
matter,
the
decision
was
communicated
to
Paxos
by
Jorge
Tenreiro,
acting
chief
of
the
SEC’s
crypto
assets
unit,
and
comes
more
than
a
year
after
the
regulator
sent
a

How To Get Free Crypto  


Wells
notice


to
the
New
York-based
institution,
indicating
a
possible
enforcement
action
over
the
Binance
USD,
or
commonly
known
as
BUSD,
stablecoin,
which
Paxos
developed
in
partnership
with
Binance.


Paxos
Emerges
From
Year-Long
Wells
Notice
Shadow


Per
the


report
,
Walter
Hessert,
Paxos’
head
of
strategy,
expressed
relief
at
the
termination
of
the
investigation,
stating
that
it
aligns
with
their
expectations
and
brings
much-needed
certainty
to
the
market. 


Paxos
initially
launched
BUSD
in
partnership
with
Binance
in
September
2019.
While
BUSD
did
not
overtake
its
competitors
Tether’s
USDT
and
Circle’s
USDC
stablecoisn
in
terms
of
market
dominance,
it
gained
its
status
as
a
widely
used
stablecoin
largely
due
to
its
integral
role
within
the
Binance
ecosystem.


While
BUSD
maintained
a
peg
to
the
US
dollar,
the
SEC
later
claimed
in
a
lawsuit
against
Binance
that
the
stablecoin
should
be
classified
as
an
investment
contract
and
therefore
a
security
under
the
Howey
test,
which
many
crypto
participants
believe
is
an
outdated
framework
for
regulating
the
crypto
market. 

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BUSD
Validated
As
Non-Security


Paxos,
in
response,
disagreed
with
the
SEC’s
characterization,
asserting
that
BUSD
was
fully
backed
by
dollar-denominated
reserves
in
a
1:1
ratio,
without
delving
into
the
agency’s
claims
regarding
profit
distribution.


The
investigation
persisted
for
over
a
year,
as
confirmed
by
the
SEC
in
response
to
a
Freedom
of
Information
Act
request
from
Fortune,
with
the
agency
stating
its
active
and
ongoing
status
as
of
July
3. 


However,
it
appears
that
the
SEC’s
stance
shifted
following
a
federal
judge’s
ruling
on
June
28,
which
favored
Binance
and
concluded
that
the
sale
of
BUSD
did
not
constitute
a
securities
offering,
leading
to
the
dismissal
of
the
charges.

The
daily
chart
shows
BNB’s
price
recovery.
Source:

BNBUSD
on
TradingView.com


At
the
time
of
writing,
Binance’s
native
token
BNB
trades
at
$532,
up
by
1%
in
the
24
hour
time
frame. 

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Featured
image
from
DALL-E,
chart
from
TradingView.com 

Go to Source
Author: Ronaldo Marquez


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