Paxos Trust Company is reportedly engaged in a constructive discussion with the Securities and Exchange Commission.
The firm’s CEO stated in an email that they’re ready to defend BUSD’s non-security status through litigation.
The NYDFS had ordered Paxos to stop issuing BUSD earlier this month.
The SEC previously issued a Wells notice to the BUSD issuer, indicating potential legal action that may be initiated.
Paxos Trust Company, the stablecoin firm behind Binance USD (BUSD), is reportedly in talks with the U.S. Securities and Exchange Commission (SEC), amid increasing regulatory scrutiny of its operations. The SEC issued a Wells notice to the BUSD issuer earlier this month, indicating their intention to initiate enforcement actions against the firm.
Paxos CEO: Will defend BUSD’s non-security status through litigation
According to a report by Reuters, Paxos CEO Charles Cascarilla told his employees that the firm was engaged in constructive discussions with the securities regulator. The internal email seen by Reuters revealed that the firm is ready to defend its position that Binance USD is not a security through litigation.
“We look forward to continuing that dialogue in private”
Paxos CEO Charles Cascarilla
Cascarilla further stated in the internal email that the company was working with the SEC toward its application for a clearing agency license. Additionally, the firm is also working with the U.S. Office of the Comptroller of the Currency (OCC) for approval of its national trust bank charter.
Paxos’s intention to engage in litigation to protect BUSD’s non-security status was initially revealed in a press release last week where the firm stated that it was prepared to “vigorously litigate” over the SEC’s Wells notice regarding the world’s third largest stablecoin. The pressure on BUSD escalated when the New York Department of Financial Services ordered the firm to stop minting the stablecoin.
While Paxos has stopped issuing BUSD, the firm stated that it would continue supporting and redeeming the tokens until February 2024. As for the decision to end its relationship with crypto giant Binance, Cascarilla stated that, “the market has evolved and the Binance relationship no longer aligns with our current strategic priorities.”