• Paxos, the issuer of BUSD and its own Pax Dollar (USDP) stablecoin, is reportedly being investigated by NYSDFS.
• Paxos has been trying to secure a national trust bank charter for a while now.
• The New York State Department of Financial Services (NYSDFS) has launched a probe into Paxos’ dealings, although the exact scope of the investigation is unclear.
Paxos Under Investigation By US Authorities: Report
Regulatory Oversight
Paxos Trust Co., a crypto company based in New York, is regulated by the New York State Department of Financial Services (NYSDFS). Companies wishing to operate in their jurisdiction must comply with the NYSDFS’ stablecoin-related guidance – which was issued after TerraUSD’s collapse – along with all other regulatory directives. In exchange, the regulator gains insights into these businesses’ operations.
Investigation Launched
Recently, the NYSDFS launched an investigation into Paxos’ dealings, although its exact scope is unclear. This news follows speculation that Paxos had been denied a national trust bank charter from the OCC but was quickly refuted by the firm itself on Twitter.
What Does This Mean?
Paxos has two main products: BUSD and its lesser-known stablecoin, USDP. The outcome of this investigation will affect both products and could have wider implications for those operating within similar regulatory frameworks across different states in America.
Conclusion
It remains to be seen what will happen next or how long this investigation will take before any conclusions are drawn or action taken against Paxos. Nevertheless, it’s important to pay attention to such developments as they can shape future industry regulations as well as consumer protection efforts in crypto.