PayPal Under SEC Scrutiny for PYUSD Stablecoin
Payments giant PayPal is currently facing regulatory scrutiny from the United States Securities and Exchange Commission (SEC) regarding its PYUSD stablecoin. In a recent filing with the SEC, PayPal disclosed that it received a subpoena from the SEC Division of Enforcement relating to its stablecoin. The company stated that it is cooperating with the SEC’s request for document production.
SEC Subpoenas and Potential Actions
It’s important to note that SEC subpoenas are primarily used to collect information and do not automatically result in legal actions or enforcement. The SEC will determine its course of action based on the information it gathers from the subpoena.
PYUSD Stablecoin Launch and Adoption
PayPal launched its PYUSD stablecoin in partnership with crypto firm Paxos in August. The stablecoin is regulated and fully backed, according to PayPal. Paxos, which issues PYUSD, is subject to regulatory oversight by the New York State Department of Financial Services (NYDFS). Additionally, PayPal holds a BitLicense from NYDFS.
Despite initial excitement surrounding the launch of PYUSD, its adoption has been slow. The current total supply of PYUSD tokens stands at around 159 million. It remains uncertain whether the SEC, which has been viewed as hostile towards the crypto industry, will take any action against PYUSD.
Prior Allegations Against BUSD Stablecoin
The SEC previously accused Binance’s BUSD stablecoin, also issued by Paxos, of being an unregistered security in its lawsuit against Binance in June. In February, the SEC issued a Wells Notice to Paxos, indicating a potential enforcement action based on allegations that BUSD qualifies as an unregistered security. However, Paxos disputed this claim and stated its readiness to litigate if necessary. Notably, Paxos halted the creation of new BUSD tokens under the direction of NYDFS.
Hot Take: PayPal Faces SEC Scrutiny over PYUSD Stablecoin
Payments giant PayPal finds itself in the regulatory spotlight as the United States Securities and Exchange Commission (SEC) launches an investigation into its PYUSD stablecoin. While SEC subpoenas don’t automatically result in legal action, the outcome remains uncertain. The slow adoption of PYUSD adds further intrigue to the situation. This development follows the SEC’s prior allegations against Paxos’ BUSD stablecoin. As the SEC continues to scrutinize stablecoins, it will be interesting to see how this plays out and what implications it may have for PayPal and the broader crypto industry.
By
By
By
By
By