Paxos In Talks With US SEC After It Was Asked To Register Binance USD As Security Token

Paxos CEO Charles Cascarilla added it will not shy away from defending Binance USD as not a security token.

Binance has claimed it will keep supporting Binance USD for some time in the near future.

Crypto exchange Paxos Trust Company, which supports Binance's stablecoin Binance USD, is currently in talks with the US Securities and Exchange Commission (SEC). This is happening after the crypto regulating agency informed the organisation that Binance USD should have had a legitimate registration with the state as a security token. In an internal mail to the employees of the platform, Paxos's Chief Executive Officer Charles Cascarilla said, "We are engaged in constructive discussions with the SEC, and we look forward to continuing that dialogue in private," as cited in a report by Reuters.

Cascarilla added Paxos will not shy away from defending its position of saying that Binance USD is not a security token. He added this will be done through litigation if the need arises in the near future.

However, both the SEC and Paxos have not commented much on the matter except for the internal mail that surfaced in the media.

In a consumer alert on February 13 this year, the New York Department of Financial Services (NYDFS) claimed that it had issued an order to the crypto firm to put an end to minting Binance USD, which is the third biggest stablecoin in the world. It has more than $16 billion in circulation all over the world.

Following this order, Paxos assured to stop issuing new Binance USD from February 21. However, the firm said it would continue assisting and redeeming the tokens until February next year.

Amid this, Cascarilla remarked that the platform's move to end the association with Binance was different from the directives given by the NYDFS. He also added that all these talks with the SEC about Binance USD have been separate matters.

He said, "The market has evolved and the Binance relationship no longer aligns with our current strategic priorities."

However, Binance has claimed it will keep supporting Binance USD for some time in the near future.

Meanwhile, Cascarilla confirmed that Paxos will continue working with the SEC when it comes to publishing its application in order to get the agency clearing license. This also means that the firm has been in talks with the US Office of the Comptroller of the Currency (OCC) to successfully obtain approval for the National Trust Bank Charter of the firm.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.