- The New York Department of Financial Services (NYDFS) is reportedly investigating Paxos, a prominent player in the stablecoin market and issuer of Binance USD (BUSD) and the native Paxos stablecoin USDP.
- Paxos has applied for a full banking charter and has obtained the coveted BitLicense from NYDFS as well as a Major Payments Institution license from Singapore.
- Regulators seem poised to move on legislating the crypto industry this year, leaving markets on edge as Paxos operates BUSD at a time when uncertainty clouds the Binance exchange.
Investigation into Stablecoin Issuer Paxos
New York’s Department of Financial Services (NYDFS) is launching an investigation into Paxos, a prominent player in the stablecoin market that issues Binance USD (BUSD) and its native Paxos stablecoin USDP. The news comes after reports that the Securities and Exchange Commission forced Kraken to close its staking facilities.
Paxos Applies for Full Banking Charter
Paxos is currently operating in New York with a coveted BitLicense obtained from NYDFS, as well as a Major Payments Institution license from Singapore. Rumors suggest that the Office of Comptroller of Currency was contemplating requiring Paxos to withdraw its application for a full banking charter, however this was denied by the company itself. In 2021, OCC provided provisional banking charter to Paxos suggesting that they are not completely against licensing them properly.
Legislation of Crypto Industry Imminent
With regulators seemingly poised to move on legislating crypto industry this year, markets are on edge especially since Paxos operates BUSD at a time when uncertainty clouds over Binance exchange. This could be what has drawn attention from authorities prompting them to launch an investigation into this project.
PaxG Gold-Backed Cryptocurrency
Another project under scrutiny by authorities is PAXG – gold-backed cryptocurrency stored in Brinks Vault London for investors. PAXG, along with BUSD and USDP all remain pegged at the time of writing.