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Zafar Naik
Zafar Naik
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- Jul 11, 2024 16:04 UTC
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Crypto Wins One! SEC Drops Investigation into Paxos’s BUSD Stablecoin
The SEC decided not to pursue legal action against Paxos, a win for the crypto company after a year-long investigation into its stablecoin BUSD.
The SEC argued BUSD was a security, requiring regulations. Paxos disagreed.
This decision by the SEC is seen as a positive sign for the crypto industry, potentially leading to more stability and future growth.
No more flash crashes and regulatory FUD – there seems to be a glimmer of hope in the crypto world! Paxos, a major stablecoin issuer, has just been cleared by the SEC after a year-long investigation. This surprising move by the regulator comes amidst a crypto market still feeling the aftershocks of recent negativity.
What does this mean for the future of crypto regulation? Dive deeper to find out!
A Year of Uncertainty Ends
Last year, the SEC issued a Wells notice to Paxos, a stablecoin issuer, hinting at potential enforcement action. The investigation centered around BUSD, a Binance-backed stablecoin issued by Paxos. The SEC had claimed BUSD was a security, a label it frequently applies to various cryptocurrencies. Gary Gensler, the SEC chairperson, is well-known for his critical stance on cryptocurrencies.
Recently, the SEC faced a partial setback in its case against Binance, with Judge Amy Berman dismissing some points of their argument. On July 9, Jorge Tenreiro, the acting chief of the SEC’s crypto assets and cyber unit, informed Paxos that no enforcement action would be recommended. This decision signals a shift, suggesting that the current administration may not be interested in establishing strict regulations for the crypto sector.
The SEC’s move to clear Paxos of charges and deny that BUSD is a security has injected a dose of optimism into the market.
Looking Ahead
Walter Hesserts, Paxos’s head of strategy, expressed significant relief at the formal termination of the investigation, calling it an expected outcome. He hopes this development will bring some stability to the market. The SEC has remained silent on the matter, but the implications are clear.
Experts believe that favorable rulings by some federal judges and a softening stance from the SEC are setting the stage for the future of crypto. Enthusiasts are now eagerly anticipating the upcoming US election, hoping that a crypto-supporting administration could propel the growth of the crypto ecosystem.
Also Read: SEC Eases Crypto Reporting Requirements: How Banks and Brokerages Can Benefit
Time will tell how the market reacts to this development!
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