SEC Concludes Investigation into BUSD

The issuer of Binance’s BUSD stablecoin, Paxos, has received a notification from the SEC indicating no plans for enforcement action.

In February 2023, the NYDFS initiated an investigation into the firm. Later, the regulator ordered Paxos to cease issuing BUSD.

The SEC also announced its intention to sue the company. The Commission’s notice claimed the digital asset was a security, a characterization the company “categorically disagreed” with.

In June 2023, the regulator filed 13 charges against Binance and its founder Changpeng Zhao. One of these involved allegations of unregistered BUSD offerings.

Paxos continued to support redemption and conversion operations for the stablecoin until February 2024.

According to CoinGecko, $69 million worth of BUSD remains in circulation. The asset’s turnover in the past 24 hours was $992,000.

In June 2024, Judge Amy Berman Jackson partially dismissed the SEC’s lawsuit against Binance. Specifically, she granted the exchange’s motion to dismiss claims regarding the offering of BUSD.

In April, a stablecoin bill was introduced in the Senate.

The document prohibits unsecured algorithmic “stablecoins” and implements anti-money laundering measures. It requires issuing firms to maintain reserves of cash and equivalents at a one-to-one ratio to back the tokens.

As reported by S&P, U.S. Congressional initiatives could weaken Tether’s dominance.

Previously, Bernstein analysts predicted the market value of “stablecoins” could grow to $2.8 trillion over the next five years.