Paxos Confirms Binance USD Of Security Concerns In Groundbreaking Tests
Key Points:
- After the two tests, Paxos concluded that BUSD does not meet the criteria to be considered a security.
- The firm will continue to support BUSD through at least February 2024 and maintain the highest standards of security and soundness in the stablecoin market.
On February 21, Paxos published a letter from its CEO, Charles Cascarilla, in which the executive detailed the company’s doomed Binance USD stablecoin, saying, “We Believe Unequivocally that BUSD is Not a Security.”
Coincu reported on February 13 that Paxos would cease issuing new BUSD stablecoins on February 21 due to directives from the New York Department of Financial Services. The order was issued by the New York regulator “as a result of multiple unresolved issues connected to Paxos’ monitoring of its connection with Binance.”
Despite Paxos’ actions, the US Securities and Exchange Commission issued a separate Wells Notice stating that BUSD is a security.
Paxos categorically disagrees with the SEC staff because BUSD is not a security under federal securities laws. This SEC Wells notice pertains only to BUSD
The claim has been refuted with a press release written by Paxos CEO & Co-Founder Charles Cascarilla:
The prevailing precedents used to identify securities in the US are known as the Howey Test and the Reves Test. Under both tests, BUSD does not meet the criteria to be a security. Our stablecoins are always backed by cash and equivalents–dollars and US Treasury bills, but never securities.
Charles Cascarilla shared
While the Howey Test considers many investment contracts to be securities, the Reves Test employs a “family resemblance” criteria to assess whether an asset is a security. As such, Paxos seeks to demonstrate that the US dollar is not a security in the broadest sense.
We are engaged in constructive discussions with the SEC, and we look forward to continuing that dialogue in private. Of course, if necessary, we will defend our position in litigation. We will share more information when we can.
Cascarilla went on to say that Paxos has handled more over $2.8 billion in Binance USD redemptions without causing any disruptions in the cryptocurrency market. Additionally, Paxos will continue to support BUSD through at least February 2024 and maintain the highest standards of security and soundness in the stablecoin market.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Thana
Coincu News
Author
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Paxos Confirms Binance USD Of Security Concerns In Groundbreaking Tests
Key Points:
- After the two tests, Paxos concluded that BUSD does not meet the criteria to be considered a security.
- The firm will continue to support BUSD through at least February 2024 and maintain the highest standards of security and soundness in the stablecoin market.
On February 21, Paxos published a letter from its CEO, Charles Cascarilla, in which the executive detailed the company’s doomed Binance USD stablecoin, saying, “We Believe Unequivocally that BUSD is Not a Security.”
Coincu reported on February 13 that Paxos would cease issuing new BUSD stablecoins on February 21 due to directives from the New York Department of Financial Services. The order was issued by the New York regulator “as a result of multiple unresolved issues connected to Paxos’ monitoring of its connection with Binance.”
Despite Paxos’ actions, the US Securities and Exchange Commission issued a separate Wells Notice stating that BUSD is a security.
Paxos categorically disagrees with the SEC staff because BUSD is not a security under federal securities laws. This SEC Wells notice pertains only to BUSD
The claim has been refuted with a press release written by Paxos CEO & Co-Founder Charles Cascarilla:
The prevailing precedents used to identify securities in the US are known as the Howey Test and the Reves Test. Under both tests, BUSD does not meet the criteria to be a security. Our stablecoins are always backed by cash and equivalents–dollars and US Treasury bills, but never securities.
Charles Cascarilla shared
While the Howey Test considers many investment contracts to be securities, the Reves Test employs a “family resemblance” criteria to assess whether an asset is a security. As such, Paxos seeks to demonstrate that the US dollar is not a security in the broadest sense.
We are engaged in constructive discussions with the SEC, and we look forward to continuing that dialogue in private. Of course, if necessary, we will defend our position in litigation. We will share more information when we can.
Cascarilla went on to say that Paxos has handled more over $2.8 billion in Binance USD redemptions without causing any disruptions in the cryptocurrency market. Additionally, Paxos will continue to support BUSD through at least February 2024 and maintain the highest standards of security and soundness in the stablecoin market.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Thana
Coincu News
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