According to a press release on Monday, stablecoin issuer Paxos acknowledged that it had received Wells’ notice from the SEC indicating that enforcement action may be taken based on its allegations that Binance USD constitutes an unregistered security. BUSD is a USD-pegged stablecoin from Binance.
But the company said it "categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws." It also claims that Paxos is "always backed 1:1 with U.S. dollar-denominated reserves, fully segregated and kept in a bankruptcy remote." account” and said the company was “prepared to vigorously pursue litigation if necessary.”
Earlier on Monday, Paxos said it would stop minting new BUSD tokens as directed by the New York Department of Financial Services (NYDFS). CoinDesk had earlier reported that Paxos was under investigation by the NYDFS.
Paxos also noted in its press release that the Wells notice was specifically aimed at BUSD and not any other part of its business. “This SEC Wells notice applies only to BUSD. To be clear, there are no other allegations against Paxos,” Paxos wrote.
