The New York Department of Financial Services (NYDFS) has verified that it is presently conducting a probe into the activities of Paxos, one of the world’s foremost stablecoin providers. Paxos themselves have confirmed this investigation.
Paxos has a very important place in the Binance Ecosystem
Renowned for running Binance USD (BUSD), Paxos has become a forerunner in stablecoin technology. Their offerings include USDP—a native Paxos USD-backed digital asset. It remains unverified whether authorities are looking into these particular coins or not; however, the NYDFS refused to comment on this matter.
Paxos stands tall amongst its competitors and runs an exchange known as ItBit, which could have sparked regulators’ attention following the SEC’s recent decision to shutter Kraken’s staking services earlier this week.
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PAXG, BUSD, and USDP are RWA tokens that store gold for investors in Brinks Vault in London; they remain listed on the exchange as of now. This has apparently caused some concern among financial authorities like the United States Office of the Comptroller of Currency (OCC), who have purportedly requested Paxos to withdraw its application for a full banking license. All eyes are now on this project – could it be successful despite these challenges?
The Crypto World On The Verge
Paxos firmly refutes this claim. We know that the Office of Comptroller of Currency (OCC) granted Paxos a provisional banking license in 2021, implying that they do not entirely disagree with their licensing endeavors. Further evidence lies in the fact that Paxos has been awarded a Bit License from the New York Department of Financial Services (NYDFS), showing its commitment to adhering to applicable regulations.
The Luna ecosystem collapse caused by TerraUSD led the New York Department of Financial Services (NYDFS) to release stringent regulations for stablecoin issuers. Unsurprisingly, Paxos has conformed to these legal mandates in its mission of obtaining a full banking license. Despite this compliance, markets remain anxious as regulators appear poised to implement more restrictive laws within the crypto industry throughout 2021 – especially since Paxos is managing BUSD amidst an atmosphere of ambivalence and doubt surrounding Binance’s exchange operations. A further investigation into their number one stablecoin may have dire consequences for the entire field.
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