TechFlow news: The New York State Department of Financial Services (NYDFS) has ordered Paxos Trust Co. to stop issuing additional stablecoin BUSD. According to Binance's statement, Paxos will continue managing the redemption of BUSD.
As previously reported, the NYDFS is investigating Paxos, the issuer of Pax Dollar (USDP) and Binance USD (BUSD), though the specific scope of the investigation remains unclear. An NYDFS spokesperson said the agency cannot comment on ongoing investigations.
According to sources familiar with the matter, stablecoin issuer Paxos is expected to face a lawsuit from the U.S. Securities and Exchange Commission (SEC) over issues related to BUSD. SEC enforcement officials have issued a Wells notice to Paxos, indicating potential enforcement action, asserting that BUSD issued and listed by Paxos constitutes an unregistered security. The SEC plans to sue Paxos for violations of investor protection laws and may take coercive measures.
A Paxos spokesperson declined to comment, and the SEC did not respond to requests for comment. In its statement, Binance said, "BUSD is issued and owned by Paxos; we only authorized the use of our brand. We will continue monitoring the situation." Original link
