Paxos receives SEC notice regarding BUSD
Paxos has received a Wells notice from the Securities and Exchange Commission (SEC). The Wells notice states that the staff of the SEC is considering recommending an action alleging that BUSD is a security and that Paxos should have registered the offering of BUSD under the federal securities laws.
Paxos issued the following statement on February 13, 2023:
“Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws. This SEC Wells notice pertains only to BUSD. To be clear, there are unequivocally no other allegations against Paxos. Paxos has always prioritized the safety of its customers’ assets. BUSD issued by Paxos is always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary”.
On Monday, Paxos said it was ending its relationship with Binance concerning BUSD. The company said it was co-operating with the New York DFS.