{"id":20426,"date":"2023-02-13T17:01:00","date_gmt":"2023-02-14T01:01:00","guid":{"rendered":"https:\/\/coinnetworknews.com\/paxos-categorically-disagrees-with-the-sec-that-busd-is-a-security\/"},"modified":"2023-02-13T17:01:00","modified_gmt":"2023-02-14T01:01:00","slug":"paxos-categorically-disagrees-with-the-sec-that-busd-is-a-security","status":"publish","type":"post","link":"https:\/\/coinnetworknews.com\/paxos-categorically-disagrees-with-the-sec-that-busd-is-a-security\/","title":{"rendered":"Paxos \u2018categorically disagrees\u2019 with the SEC that BUSD is a security"},"content":{"rendered":"

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Paxos Trust Company has released a statement noting that it “categorically disagrees” with the United States securities regulator which has painted Binance USD (BUSD) as a security.\u00a0<\/p>\n

In the Feb. 13 statement<\/a>, the BUSD issuer confirmed recent reports<\/a> that it had received a Wells notice from the United States Securities and Exchange Commission (SEC) over BUSD<\/a> and its alleged failure to register the offering under federal securities laws.<\/p>\n

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END\/ Paxos remains dedicated to the development of stablecoins, tokenization & #blockchain<\/a> technology. We\u2019ll continue serving the world\u2019s most respected and established companies to create a more open financial system.<\/p>\n

\u2014 Paxos (@PaxosGlobal) February 13, 2023<\/a><\/p><\/blockquote>\n

“Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws,” Paxos said. <\/p>\n

The firm noted it had received the notice on Feb. 3, adding that “there are unequivocally no other allegations against Paxos.”<\/p>\n

“We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary,” it added. <\/p>\n

On Feb. 13, New York Department of Financial Services (NYDFS) ordered Paxos to halt the issuance<\/a> of BUSD.<\/p>\n

Following the order, Paxos announced in a Feb. 13 Twitter post<\/a> it will halt minting new BUSD tokens<\/a> effective Feb. 21. <\/p>\n

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3\/ Paxos will continue to manage all outstanding BUSD reserves, ensuring all BUSD are always backed 1:1 with US dollar-denominated reserves held in bankruptcy remote accounts.<\/p>\n

\u2014 Paxos (@PaxosGlobal) February 13, 2023<\/a><\/p><\/blockquote>\n

However, Paxos has said BUSD will remain fully supported and redeemable to onboarded customers through at least February 2024.<\/p>\n

“New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust,” Paxos said. <\/p>\n

Related: <\/em><\/strong>SEC lawsuit against Paxos over BUSD baffles crypto community<\/em><\/strong><\/a><\/p>\n

New York State’s Department of Financial Services, or NYDFS, reportedly received a complaint from stablecoin issuer Circle <\/a>regarding Binance’s reserves prior to its crackdown on BUSD.<\/p>\n

Binance CEO Changpeng “CZ” Zhao says the exchange will continue<\/a> to support BUSD despite issuer Paxos being ordered to stop minting the stablecoin by the U.S. SEC and New York regulators.<\/p>\n