Paxos, the blockchain company that issues Binance’s stablecoin Binance USD (BUSD), is discussing the SEC’s move with the U.S. Securities and Exchange Commission to classify the stablecoin as a security.
Paxos CEO Charles Cascarilla has emailed staff that the company is in productive conversations with the commission regarding BUSD and will continue behind closed doors.
Cascarilla reportedly said, “We are engaged in constructive discussions with the SEC, and we look forward to continuing that dialogue in private” adding that the business is prepared to go to court to support its stance that BUSD is not a security.
Paxos backs the BUSD stablecoin of Binance, the world’s largest crypto exchange by trading volume. The value of one BUSD is equal to one USD.
This past week, Paxos was told by New York state authorities to cease minting new BUSD coins. New York’s financial watchdog cited several problems connected to Paxos’ supervision of its connection with Binance in a consumer warning announcing the order.
It was later disclosed that the SEC had warned of legal action against the business because of its issue of BUSD. According to the organisation, BUSD should be classified as an unlisted asset.
In light of the recent governmental crackdown, Paxos has stated that effective February 21, it will no longer issue new BUSD coins but will continue to support and pay existing tokens until at least February 2024.
Paxos No Longer Want Partnership With Binance
Cascarilla explained in the email that it was ending the collaboration because “it no longer aligns with our current strategic priorities.” He also stressed that the partnership with Binance is unrelated to talks with the NYDFS order and the SEC regarding BUSD.
CEO Paxos also mentioned that the business was still working on getting its application to the SEC for a clearing agency license published and on final clearance for its national trust bank charter from the U.S. Office of the Comptroller of the Currency (OCC).
In the face of rising legal attention in the US, Binance is reportedly looking beyond Paxos and dollar-based stablecoins.
The chief strategy officer of Binance, Patrick Hillmann, recently stated in an interview that the exchange had seen interest from several private and governmental organisations in working together to introduce a new stablecoin, which may or may not be dollar-based.
“There are very interesting opportunities, particularly in Europe and the Middle East,” Hillmann stated in an interview with Forbes.
Binance CEO CZ also proposed the exchange platform issuing a non-dollar stablecoin. In a Twitter post, CZ said the firm is looking into other issuers and non-USD-based stablecoins.
We are exploring others, and non-USD based stablecoins.
— CZ 🔶 Binance (@cz_binance) February 13, 2023