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Stablecoin issuer Paxos probed by New York regulator

Paxos Trust, Binance’s issuer BUSD stablecoin, is reportedly being investigated by the New York State Department of Financial Services (NYDFS).

See related article: Binance returns to Korea with the acquisition of GOPAX

Fast facts

  • Although the exact scope of the investigation is unclear, it has been confirmed that the investigation Bloomberg by an anonymous person familiar with the subject.
  • A NYDFS spokesperson told Bloomberg that the regulator could not comment on ongoing investigations.
  • Paxos is also the issuer of its US dollar-pegged stablecoin, Pax Dollar (USDP), the sixth-largest stablecoin by market capitalization, according to CoinMarketCap data.
  • The probe could be part of a larger US crypto de-banking, which may be a risk according to Germany-based crypto analyst Jonas Betz. “Investors should be aware of a possible U.S. crypto debanking operation by the Fed and the Office of the Comptroller of the Currency (OCC), which speculation has prepared measures deemed draconian and aimed at killing crypto“Wrote Betz, in a LinkedIn message to Discard.
  • Thursday, Paxos denied speculation that he was asked to withdraw his application for a national trust bank charter from the OCC, or that he was denied the charter, adding that “Paxos continues to work constructively with the OCC.”
  • Crypto service providers in New York must obtain a BitLicense to operate. Paxos was granted a limited purpose trust company charter by the regulator in 2015.

See related article: Binance suspends international transfers in US dollars, CEO reports problems with banks

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