SEC to sue Paxos for listing Binance USD stablecoin: WSJ

  • The SEC is planning to sue Paxos for listing BUSD stablecoin, alleging it is an unregistered security, WSJ reports, citing anonymous sources.
  • Binance said in a statement that Paxos issues and owns the BUSD stablecoin.

The U.S. Securities and Exchange Commission plans to sue Paxos for listing the Binance USD coin, alleging it is an unregistered security, according to the Wall Street Journal.

The SEC sent Paxos, a blockchain and trust company, a letter informing it of “a possible enforcement action,” the WSJ reported, citing anonymous sources. The suit is reportedly for "violating investor protection laws."

The move comes as U.S. regulators step up efforts to regulate cryptocurrency companies in the aftermath of exchange FTX’s well-publicized collapse. Another exchange, Kraken, recently settled with the SEC after being charged for its “staking-as-a-service program.”

Binance USD, or BUSD, is a stablecoin pegged to the dollar. Binance and Paxos launched it in 2019, according to the Wall Street Journal.

In a statement, Binance said it will continue to monitor the situation and that Paxos issues and owns BUSD.

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RT Watson is a senior reporter at The Block who covers a wide array of topics including U.S.-based companies, blockchain gaming and NFTs. Formerly covered entertainment at The Wall Street Journal, where he wrote about Disney, Netflix, Warner Bros. and the creator economy while focusing primarily on technological disruption across media. Previous to that he covered corporate, economic and political news in Brazil while at Bloomberg. RT has interviewed a diverse cast of characters including CEOs, media moguls, top influencers, politicians, blue-collar workers, drug traffickers and convicted criminals. Holds a master's degree in Digital Sociology.

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