Breaking: SEC to sue stablecoin issuer Paxos over Binance USD

Paxos Trust Company, a New York-based financial institution and technology company specializing in blockchain, is reportedly another target for the US Securities and Exchange Commission (SEC). According to a report from Wall Street Journal, the company received Wells Notice from the SEC over issuing and listing Binance's stablecoin Binance USD (BUSD), which is an unregistered security.

A Wells Notice is issued by the US SEC to inform individuals or companies of completed investigations where infractions have been discovered. Although the report has not been made public yet, FXStreet has reached out to Paxos Trust Company and Binance for comment. This move from SEC comes after a recent crackdown on cryptocurrency staking, a lucrative sector that earns users money or interest by pledging their crypto assets to an intermediary or a crypto network.

The SEC Chair Gary Gensler, in his efforts to end the widespread noncompliance with US securities laws, targeted Kraken, a crypto exchange company that was offering staking services to US users. The exchange agreed to put an end to this service and will also pay $30 million in fines to the SEC.

This is a developing story, more details will be updated soon.