Key Points:
The SEC’s Division of Enforcement issued a subpoena on November 1, 2023, requesting documents related to the project. PayPal has stated that it is fully cooperating with the SEC’s request.
PayPal PYUSD stablecoin launched in August is pegged to the US dollar and is backed by US dollar deposits, short-term Treasury bonds, and similar cash equivalents. This development comes as the company seeks to enhance its offerings in the cryptocurrency market through a partnership with crypto firm Paxos.
It’s worth noting that SEC subpoenas are typically used for information gathering and may not necessarily lead to legal actions or enforcement measures. The SEC will determine its course of action based on the information it collects.
Although PayPal PYUSD stablecoin has garnered attention in the crypto community, it has faced criticism for its perceived lack of unique features and utilization of older technology with design flaws, including being built on the Ethereum blockchain, known for its high transaction fees.
Despite the SEC’s investigation, PayPal’s market value has continued to rise. According to Reuters, the company added nearly $4 billion to its market capitalization, with shares climbing nearly 7% to $55.12. This increase is attributed to investors’ enthusiasm following PayPal’s commitment to becoming a “leaner” organization, as well as a positive full-year profit forecast.
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.
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