The investigation concerns whether Paxos and certain of its officers and/or directors have engaged in unlawful business practices.
In response to Paxos’ dispute with the Securities and Exchange Commission, Pomerantz has begun an investigation into Paxos on behalf of consumers to uncover any misconduct by the Binance USD (BUSD) stablecoin issuer.
On behalf of its clients, Pomerantz, a corporate securities and antitrust law firm with locations across the US and in Paris, has opened an inquiry against Paxos Trust Co., the company behind the Binance USD (BUSD) stablecoin.
The blockchain firm received a Wells notice from the SEC on February 13 ordering the company to halt producing new BUSD coins immediately because the asset is an unregistered securities and must fall under its jurisdiction.
In light of this, Pomerantz is looking into potential “unlawful business practices” by Paxos executives. Pomerantz asserts to have assisted countless victims of securities fraud in the past in getting their money back.
Importantly, Paxos has objected to the SEC’s designation of BUSD as a security, in contrast to Jesse Powell’s Kraken, which swiftly struck a $30 million settlement with the agency after the regulator recently ordered the shutdown of its crypto staking platform.
The continuing Paxos-SEC spat has resulted in enormous BUSD stablecoin inflows into centralized exchanges, with Binance’s bitcoin (BTC) reserves sharply declining as a result of the FUD generated.The issue has also sparked a heated discussion about what US law considers to be a security on the cryptocurrency Twitter platform.
The SEC seems unmoved despite criticism for its overbearing approach to crypto regulation, and it won’t come as a surprise to see other enforcement measures against other American crypto enterprises in the near future.
