SEC Ends Investigation Into Paxos, Marking Win For Crypto Industry
By Benzinga
The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Paxos, a New York-based stablecoin issuer, without recommending enforcement action.
What Happened: Jorge Tenreiro, acting chief of the SEC’s crypto assets and cyber unit, informed Paxos of the decision, Fortune reported. This comes after the SEC issued a Wells notice to Paxos over its BUSD stablecoin, which is backed by the U.S. dollar and issued in partnership with Binance.
The SEC’s decision follows a partial defeat in a lawsuit against Binance, where a federal judge ruled that the sales of BUSD did not constitute a securities offering. This ruling appears to have influenced the SEC’s stance on the matter.
Walter Hessert, head of strategy at Paxos, expressed relief over the decision, stating it should create more market certainty. The SEC declined to comment on the investigation’s existence or nonexistence when approached by Fortune.
Read Also: Bitcoin Mining Stocks Marathon Digital, CleanSpark And Riot Platforms Are Rising: What’s Going On?
Why It Matters: The conclusion of this probe is seen as a significant win for the stablecoin sector amid ongoing regulatory uncertainty. The investigation had been a point of concern for many in the crypto space, particularly given recent regulatory actions and statements.
In May, SEC Chair Gary Gensler criticized the Financial Innovation and Technology for the 21st Century Act (FIT21), warning that it would create new regulatory gaps and undermine investor protections. The SEC’s stringent stance on crypto regulations has been a source of tension within the industry.
Crypto industry experts have called for bipartisan support for sound crypto policies, emphasizing that “pro-crypto is pro-American values.” This came after the U.S. Senate voted to overturn the SEC’s Staff Accounting Bulletin No. 121 (SAB 121), a policy that had been contentious within the industry.
Vitalik Buterin, co-founder of Ethereum, expressed concerns over the current state of cryptocurrency regulation in July, criticizing the “anarcho-tyranny” of existing regulations.
The SEC’s decision to end its investigation into Paxos without enforcement action is seen as a positive step for the industry, potentially easing some of the regulatory pressures that have been a significant concern for crypto companies.
Read Next:
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: Shutterstock
