BNB falls on news of the SEC’s claims against Paxos

The price of Binance’s BNB token fell by almost 6% amid news of the SEC‘s interest in the BUSD stablecoin and its issuer Paxos.

\n\n\n\n

\n\n\n\n

Earlier, The Wall Street Journal reported that the regulator intends to sue the American company over its involvement in issuing BUSD.

\n\n\n\n

Founder and CEO of Binance, Changpeng Zhao, noted that Paxos operates the stablecoin independently. According to the company’s assurances, the coin is fully backed by reserves.

\n\n\n\n

#BUSD. A thread. 1/8

In summary, BUSD is issued and redeemed by Paxos. And funds are #SAFU!

— CZ 🔶 Binance (@cz_binance) February 13, 2023

\n\n\n\n

Regarding the regulator’s accusations of issuing unregistered securities in the form of BUSD, Zhao cited the opinion of Miles Deutscher. The analyst explicitly pointed out that investors could not have “an expectation of profit” when buying a dollar-pegged coin contrary to the Howey test.

\n\n\n\n

The SEC has labelled BUSD as an “unregistered security”, and is suing its issuer, Paxos.

But how on earth is a STABLECOIN considered a security, when it clearly doesn’t meet the Howey Test criteria.

No one has ever had “the expectation of profit” when buying $BUSD. pic.twitter.com/QXOlDUyvc3

— Miles Deutscher (@milesdeutscher) February 13, 2023

\n\n\n\n

PayPal paused work on its own stablecoin amid news of an investigation into Paxos.