BUSD issuer Paxos to have ‘constructive discussions’ with the SEC

• Paxos CEO Charles Cascarilla recently told his employees that the firm was in talks with the SEC regarding various issues.
• The CEO revealed that his firm had ended its relationship with crypto giant Binance earlier this week.

Paxos Trust Company, the firm that issued the world’s third largest stablecoin, Binance USD [BUSD], until two weeks ago, has indicated that it may engage in litigation to defend its position on its security status. The firm’s CEO recently wrote to his employees, detailing the ongoing efforts and discussions with the U.S Securities and Exchange Commission and other agencies. 

Paxos ready to defend BUSD through litigation

According to an update from Paxos, the company’s co-founder and CEO Charles Cascarilla shared a message with his employees on 18 February, revealing that the firm is in “constructive discussions” with the SEC. The CEO reiterated the firm’s opposition to the Wall Street regulator’s claim that BUSD is a security. Cascarilla told his employees that Paxos would defend BUSD’s non-security status through litigation if necessary. 

Following the Wells notice from the SEC, which informed Paxos about potential enforcement actions against it, the firm stated in a press release that it was prepared to engage in vigorous litigation against the SEC for its stance on BUSD. At the time, the BUSD issuer stated that it categorically disagreed with the allegations made by the securities regulator. 

The CEO’s email further revealed that the firm was working with the SEC to publish its clearing house agency application, in addition to coordinated efforts with the U.S. Office of the Comptroller of the Currency (OCC) for conditional approval of its national trust bank charter. 

Speaking on the relationship with Binance, the Paxos chief revealed that the firm had ended its relationship with the world’s largest crypto exchange earlier this week. According to the CEO, the changing market conditions lead to separate strategic priorities for both firms. He clarified that the decision to part ways with Binance had nothing to do with the increased regulatory scrutiny of Paxos.