The SEC will sue Paxor for issuing BUSD, claiming the latter is an unregistered security.
Paxos has announced that it will stop issuing BUSD.
- The Securities and Exchange Commission has already informed Paxos that it is going to sue the company for violating investor protection laws, according to reports.
- BUSD is a stablecoin issued by Binance, one of the world's largest crypto exchange companies.
- Following the SEC decision, Paxos announced that it will end its partnership with Binance and review its projects in uncertain markets that face regulatory hurdles and could risk financial ruin for its customers.
- The company, however, has denied that BUSD is a security and claims that it will use legal matters to push its case forward.
- Binance Coin has dropped 7% since the SEC's decision, as investors have withdrawn over $830M from the exchange in less than 24 hours.
- This news comes only a few days after the SEC forced Kraken, one of the most popular crypto exchanges in the world, to shut down its staking service. The company reached a $30M settlement with the regulator.
