SEC intends to sue crypto firm PAXOS over Binance USD token.

The Securities and Exchange Commission (SEC) is planning to sue crypto firm Paxos Trust Co. over the Binance USD token, as the SEC claimed that BUSD is an unregistered security, according to The Wall Street Journal.

Lawsuit Against PAXOS

The Securities and Exchange Commission (SEC) is planning to sue crypto firm Paxos Trust Co. over Binance USD token as SEC claimed that BUSD is an unregistered security. According to The Wall Street Journal.

Since Paxos is BUSD‘s issuer, the SEC’s enforcement staff issued a letter to Paxos known as a Wells notice, which the agency uses to inform companies and individuals of a possible enforcement action. After receiving a Wells Notice, the accused has 30 days to react with a legal brief called a Wells Submission, which comprises points demonstrating why the charges should not be pursued against potential defendants, according to the reports.

About PAXOS

PAXOS was founded in 2012, according to the Paxos website, Paxos is a crypto exchange redefining financial infrastructure. Its blockchain solutions tokenize, custody, trade, and settle assets for enterprise clients, enabling any asset's trustworthy and instantaneous movement at any time. Paxos formed a strategic relationship with the famous cryptocurrency exchange Binance and as a result, Paxos became the owner and issuer of BUSD, a stablecoin backed by the USD. It has a market capitalization of about $16 billion, making it the third biggest stablecoin.

As far as we know, Paxos recently is under siege from a number of regulators, including the New York State Department of Financial Services（NYDFS). WikiFX has given this broker a low score of 1.38/10.

Peoples Anger Against SEC on Twitter

Ironically, on Twitter, many people showed their anger against SEC. They consider SEC a corrupt organization that cannot protect consumers with the FTX fraud case but extorts other companies left and right for multi-million dollar settlements. Some people even asked Gary Gensler, the Chairman of SEC, to step down. See below.

Impact on Binance

Paxos is targeted by SECA bringing trouble to another crypto exchange giant, Binance. Binance is the most used trading platform of BUSD, which is issued by Paxos. Most trading pairs on this platform are composed of BUSDs. The stability of BUSD has a great impact on Binance as well.