Stablecoin Issuer Paxos Is Being Investigated by New York Regulator

Paxos is being Investigated by the New York Department of Financial Services.

The Full scope of the Investigation is Unclear. Paxos’ Stablecoins Include the Pax dollar (USDP) and Binance USD (BUSD), a Binance-marked Stablecoin offered through a white-name service.

The Agency could not comment on Ongoing Investigations. Paxos was in the news recently over rumors.
The Office of the Comptroller of the Currency could ask it to withdraw its application for a full banking Charter.

Paxos has Denied these Rumors. However, an ongoing Investigation by a State Regulator recommends the company, which received a provisional bank Charter from the OCC in 2021, is to be sure under closer examination than its peers may be.
Paxos also holds a virtual currency permit – commonly referred to as BitLicenses – issued by NYDFS.
A Paxos Spokesperson didn’t return a solicitation for comment by press time.
NYDFS distributed Stablecoin direction in June, guiding issuers to guarantee their Stablecoins be fully backed with assets segregated from the issuers’ funds and attested to routinely.

The Direction, which was issued right after the Collapse of the TerraUSD/luna Stablecoin ecosystem, is focused on asset-backed stablecoins. NYDFS had been working on the direction since preceding the collapse, Superintendent Adrienne Harris told.

The scope of the Crypto-Related Investigation isn’t yet clear.