Major Victory in the Crypto World! U.S. SEC Declares BUSD is Not a Security
On Thursday, the cryptocurrency industry celebrated a significant legal triumph as the U.S. Securities and Exchange Commission (SEC) announced its decision to drop the investigation into stablecoin issuer Paxos and its Binance USD (BUSD) stablecoin without pursuing enforcement action.
Paxos, a leading regulated blockchain and tokenization infrastructure platform, revealed in a press release that it had received an official termination notice from the SEC. This notice confirmed that the SEC would not recommend any enforcement action against Paxos Trust Company.
In 2023, Paxos was issued a Wells Notice by the SEC, which alleged that BUSD was an unregistered security and that Paxos was in violation of federal securities laws.
At that time, BUSD was the third-largest stablecoin in the market, boasting a market cap of $1.661 billion. However, its standing declined after Paxos announced it would cease issuing the token shortly following the investigation announcement.
In response to this development, Paxos defended BUSD and reiterated their stance that stablecoins should not be classified as securities.
“Paxos Trust Company has always maintained that its U.S. dollar-backed stablecoins are not securities under federal securities laws, and the Wells Notice was unfounded and unreasonable,” they stated. “We take pride in our persistent advocacy for digital assets with stable value, and we welcome the SEC staff’s decision not to pursue enforcement action regarding BUSD against Paxos.”
This resolution marks a pivotal moment for the cryptocurrency sector, potentially setting a precedent for how stablecoins are regulated in the future.
