The company Paxos, which created the Binance USD (BUSD) and Pax Dollar (USDP) tokens, will be sued by the U.S. Securities and Exchange Commission (SEC) for the latter stablecoin. The SEC purportedly sent the company a letter. In the letter, the regulator warned Paxos of potential enforcement action.
SEC Decides to Lawsuit Paxos
BUSD is a stablecoin developed by Paxos, which was created as a result of an agreement with Binance. BUSD is unregistered security, as per the SEC. The regulator is bringing legal action against the business for “violating investor protection legislation.” Last week, did the New York Department of Financial Services [NYDFS] begin to investigate the company.
Letter about the Lawsuit
According to the allegations, in the official letter sent by the SEC to the company, the SEC informed the company that it could sue the company. The letter cited violations of investor protection laws as the cause of action.
The allegations continued that the letter did not indicate that a lawsuit was sure to be filed but that it was a warning and information. Therefore, there is a possibility that the SEC may not file a lawsuit.
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