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SEC weighs action against Paxos, BUSD issuer

After the hit to crypto exchange Kraken, the U.S. Securities and Exchange Commission is now targeting the stablecoin issuer Paxos and Binance's BUSD token.

By Mike Hesp
• 1 min read
SEC weighs action against Paxos, BUSD issuer

In the wake of the hit to crypto exchange Kraken, the U.S. Securities and Exchange Commission is now focusing on the stablecoin issuer Paxos and Binance's BUSD token.

According to reports in The Wall Street Journal the U.S. Securities and Exchange Commission is currently preparing a lawsuit against the stablecoin issuer Paxos. They are accused of offering an unregistered security by listing the Binance stablecoin BUSD.

According to anonymous sources, Paxos had already received a letter from the agency threatening potential enforcement actions. Meanwhile, Binance said in a statement that it was watching the situation and stressed that Paxos was responsible for issuing and operating the stablecoin.

In addition to Binance's official stablecoin, the company also runs other token products, including Paxos Gold, which is tied to the value of gold.

The potential action by the SEC against the stablecoin issuer strengthens its recent hardline regulatory stance on cryptocurrencies.

Last week the agency sanctioned the crypto exchange Kraken for alleged market rule violations. According to the SEC, Kraken offered unregistered securities through its staking program.

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