Paxos Cuts Ties With Binance Following Regulatory Concerns

Paxos, the company behind the BUSD stablecoin, has ended its partnership with Binance, alleging a divergence of strategic interests. Paxos is now in talks with the US Securities and Exchange Commission (SEC) over a recent Wells notification alleging that BUSD is security. Meanwhile, SEC Commissioner Hester Peirce has slammed the SEC's recent enforcement efforts against cryptocurrency businesses, calling them “unimaginative” forms of investor protection.

Paxos CEO Clarifies Reasons for Ending Relationship with Binance Amid Regulatory Scrutiny

According to Paxos CEO Charles Cascarilla, the decision to end the relationship with Binance was unrelated to recent regulatory changes by the New York Department of Financial Services and the Securities and Exchange Commission. Paxos was recently instructed by the NYFSD to cut connections with Binance and cease minting the Binance-branded BUSD stablecoin. Simultaneously, the SEC filed a Wells Notice claiming that BUSD is unregistered security.

After the NYFSD order, investors redeemed $2.8 billion in BUSD via Paxos. When investors abandoned the Binance-branded currency, the decentralized exchange Curve witnessed an inflow of BUSD and a decrease in Tether liquidity. Despite current SEC negotiations, Cascarilla told BUSD investors that Paxos will fulfill BUSD redemptions until at least February 2024.

SEC Commissioner Hester Peirce Calls for Revolutionary Approach to Cryptocurrency Regulation and Investor Protection

In a recent interview with Frank Chapparro, SEC Commissioner Hester Peirce revealed her dissatisfaction with the agency's approach to prosecuting rogue actors in the cryptocurrency space. She proposed a new strategy incorporating a registration procedure that complies with securities regulations and may better benefit investors. Before addressing any innovative product features, each registrant would “uniformly” answer general questions. Peirce claimed that this technique would be preferable to undertaking enforcement steps after the fact. She also attacked the concept of shutting down programs so that a certain demographic cannot access them, calling it “unimaginative” investor protection.

Peirce is one of five commissioners that vote on regulations based on current securities laws that the SEC creates. SEC Chair Gary Gensler controls the agency's regulatory agenda, and the five commissioners vote democratically on enforcement or settlement actions.

Finally, Paxos has ended its cooperation with Binance owing to a divergence of strategic interests, while also speaking with the SEC over a recent Wells notice. Meanwhile, SEC Commissioner Hester Peirce has slammed the SEC's recent enforcement efforts against cryptocurrency businesses, calling them “unimaginative” forms of investor protection. She proposed a registration method that complies with securities rules and urged against closing programs so that a certain demographic cannot access them.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

iOS: t.ly/UUCj

Android: t.ly/cfYt