SEC Registers Paxos as a Clearing Agency

SEC registers Paxos as a clearing agency, marking a first for blockchain firms.

The U.S. Securities and Exchange Commission (SEC) has registered Paxos Securities Settlement Company (PSSC) as a clearing agency. The platform is the first blockchain organization in the country to achieve this status.

According to a press release, the license allows for the clearing and settlement of transactions with approved securities as a central counterparty.

Paxos co-founder and CEO Charles Cascarilla noted that the company had been working towards this for seven years. Since 2019, the project operated under a no-action letter from the regulator.

In a pilot phase that began in February 2020, the company’s infrastructure processed daily transactions with U.S. equities for several major financial institutions. The testing confirmed the ability to settle trades on the same day and demonstrated potential cost and operational risk reductions.

Full registration removes the experimental status and allows Paxos to scale its service. The company plans to expand its infrastructure for partners dealing with digital assets and the tokenization of traditional instruments.

Paxos’ clients include giants such as PayPal, Interactive Brokers, Mastercard, and Mercado Libre.

In April, the SEC eased requirements for self-custodial crypto wallets.