Paxos Trust in discussions with the SEC over the registration of $BUSD as a security
Notably, the New York financial regulator also discovered that Paxos had failed to conduct regular risk assessments and due diligence of Binance and customers holding BUSD issued by Paxos.
Although Paxos has agreed to halt the issuance of new BUSD tokens this month, it will still be able to support the existing tokens for one more year. The Paxos boss maintains that the decision to sever ties with the crypto giant was unrelated to the recent enforcement action or the ongoing discussions with the SEC regarding Binance USD.
Previously, the SEC told Paxos that it was intending to take the firm to court for violating investor protection laws. Interestingly, the regulatory agency had not previously gone after any top stablecoin issuer. Meanwhile, a recent Bloomberg report stated that Circle, the issuer of the popular USDC stablecoin, raised concerns about Binance's handling of reserves months prior to New York regulators' intervention, shedding light on the ongoing battle between the two companies for supremacy in the lucrative stablecoin market.
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