SEC May Sue against Paxos, Stablecoin Market Has Huge Impact
Key Points: Although not yet officially announced, the US Securities and Exchange Commission is most likely to be preparing to take legal action against Paxos.
Any other stablecoin issuers should sign up or be ready to face a lawsuit from SEC if the SEC acts.
Paxos does not agree with the arguments of the regulator. It could cost a lot if Paxos took action against the SEC.
If the US Securities and Exchange Commission files a lawsuit against Paxos informally, it will have a significant effect on the $137 billion stablecoin marketplace. On February 13, the SEC issued a Wells Notice to Paxos announcing that it intends to sue Paxos for BUSD. The New York State Department of Financial Services ordered Paxos not to issue new BUSD tokens. Soon after, the New York State Department of Financial Services issued a “Wells Notice” to Paxos, directing them to stop issuing new BUSD tokens. Paxos also agreed that it would enforce it.
“If Paxos is charged by the SEC, any other stablecoin holder should register or prepare for a lawsuit against the SEC.”
Renato Mariotti, a partner in BCLP, stated that Mariotti believes that the SEC would likely settle with Paxos. He also said that Paxos recognizes the BUSD as security. This will encourage other stablecoins, such as Bitcoin, to follow suit and sign up to the SEC. However, the cost of doing so is high. Litigation can be costly and take place over many years. Mariotti states that another consequence is that the SEC could regulate assets used to support stablecoins, and requirements for digital currencies matters to save money on the market.
“The litigation will take many years and there is a high chance of losing the case to the SEC. Paxos’s opposition to the SEC could create risks and make BUSD less appealing to the market.
According to reports, Tether and Circle, the issuer of USDC, are “close to the US government.” Reportedly, Tether and Circle, the issuer of USDC, are “close to the US government.” Circle CEO Jeremy Allaire has previously called for more regulation of stablecoins.DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.Join us to keep track of news: https://linktr.ee/coincuFoxyCoincu NewsTags: # Cryptocurrencies#MarketsBlockchainCirclecryptoPaxosSECTetherUSDC