SEC Ends Paxos Probe, Declares Stablecoin a Non-Security
![SEC Ends Paxos Probe, Declares Stablecoin a Non-Security](/content/images/size/w1200/2024/07/8a229d46-62bf-4dd3-a047-6e409e31170a.png)
The U.S. Securities and Exchange Commission (SEC) has concluded its investigation into Paxos, the New York-based issuer of the Binance USD (BUSD) stablecoin, deciding not to recommend any enforcement action against the company. This decision marks a shift in the regulatory landscape for stablecoins, which are pegged to and backed by the U.S. dollar. The SEC had previously issued a Wells notice to Paxos, suggesting that BUSD might be treated as a security, but a federal judge's ruling determined that BUSD sales did not constitute a securities offering.
The decision comes after the SEC's recent legal defeat against Binance, which has influenced its regulatory stance. The move is seen as a positive development for the stablecoin sector, which includes companies like PayPal and VanEck. The Commodity Futures Trading Commission (CFTC) Chairman's statement that 70% to 80% of all cryptocurrencies are not securities further complicates the SEC's position. The conclusion of the Paxos investigation is expected to provide more regulatory clarity and potentially foster broader adoption of stablecoins by global enterprises.