Key Takeaways:
- The SEC will not take enforcement action against Paxos for its Binance USD (BUSD) token.
- Previous court rulings, including those related to XRP and BUSD, have been unfavorable to the SEC’s stance on certain tokens being classified as securities.
- The SEC continues enforcement actions against other crypto firms, with recent Supreme Court rulings potentially affecting policy interpretations.
The United States Securities and Exchange Commission (SEC) has decided not to take enforcement action against stablecoin issuer Paxos regarding its Binance USD (BUSD) token.
In February 2023, Paxos received an SEC Wells notice warning that BUSD might be considered an unregistered security, potentially violating federal securities laws.
“Paxos prevails in SEC investigation of BUSD stablecoin” 👏
— Paxos (@Paxos) July 11, 2024
On Tuesday, we received a formal termination notice from the SEC stating that it will not recommend enforcement action against Paxos Trust Company in the investigation of Binance USD (BUSD).
View the letter and our… pic.twitter.com/8kjysfsPg3
However, the SEC has now indicated that it will not pursue this case. Paxos maintained that their USD-backed stablecoins are not securities and viewed the SEC’s notice as unwarranted.
This decision follows several court rulings unfavorable to the SEC, including a July 2023 ruling that the XRP token was not a security in the context of certain sales, and a June 2024 ruling citing the Ripple decision in dismissing a claim related to BUSD.
The @SECGov and @GaryGensler are starting to get tired of losing. They just gave up on their sham investigation into the Paxos stablecoin. I wonder if the SEC will reimburse Paxos for 10's of millions of dollars they must have cost them in time and expense with this bullying and… pic.twitter.com/3PsUXvEyWB
— Tyler Winklevoss (@tyler) July 11, 2024
Despite this, the SEC continues enforcement actions against other crypto firms such as Ripple, Binance, Kraken, and Coinbase.
Recent Supreme Court rulings may also impact how federal agencies interpret policies in these cases.
About The Author
Victor Fawole, a seasoned Web3 content creator and social media influencer, excels in bringing the pulse of the crypto world to our readers.
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