{"id":74048,"date":"2023-02-13T19:49:20","date_gmt":"2023-02-13T17:49:20","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=74048"},"modified":"2025-09-09T17:53:56","modified_gmt":"2025-09-09T14:53:56","slug":"new-york-regulator-explains-paxos-decision","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/new-york-regulator-explains-paxos-decision\/","title":{"rendered":"New York regulator explains Paxos decision"},"content":{"rendered":"<p>The infrastructure company and issuer of stablecoins Paxos failed to ensure the safety of BUSD, which could have enabled illicit activity. <a href=\"https:\/\/www.reuters.com\/article\/fintech-crypto-binance-stablecoin\/new-york-regulator-says-paxos-unable-to-safely-issue-binances-stablecoin-idUSL8N34T42O\">Reuters<\/a> reported this to the New York Department of Financial Services (NYDFS).<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;[Paxos] violated its obligation to conduct periodic risk assessments and updates to the <span data-descr=\"a thorough customer due diligence to verify their identities\" class=\"old_tooltip\">due diligence<\/span> of Binance customers and Paxos-issued BUSD to prevent the platform from being used by bad actors,&#8221; the NYDFS said.<\/p>\n<\/blockquote>\n<p>On February 10, it was revealed that the regulator <a href=\"https:\/\/forklog.com\/en\/news\/bloomberg-new-york-regulator-opens-investigation-into-paxos\">initiated an investigation<\/a> into the company.<\/p>\n<p>Subsequently, the NYDFS ordered Paxos to stop issuing BUSD. Its representatives confirmed that they are ending their cooperation with Binance regarding the stablecoin, and from February 21 will halt the minting of new coins. At the same time, the firm will continue to support buybacks and conversions at least until February 2024.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">1\/ This morning, Paxos announced it will halt minting new <a href=\"https:\/\/twitter.com\/hashtag\/BUSD?src=hash&#038;ref_src=twsrc%5Etfw\">#BUSD<\/a> tokens effective February 21. Read the full press release from Paxos here: <a href=\"https:\/\/t.co\/jXZY1ak8DR\">https:\/\/t.co\/jXZY1ak8DR<\/a><\/p>\n<p>\u2014 Paxos (@PaxosGlobal) <a href=\"https:\/\/twitter.com\/PaxosGlobal\/status\/1625091554951004161?ref_src=twsrc%5Etfw\">February 13, 2023<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Earlier, The Wall Street Journal <a href=\"https:\/\/forklog.com\/en\/news\/sec-warns-paxos-of-enforcement-action-reports-say\">reported<\/a> that the U.S. Securities and Exchange Commission plans to sue Paxos for its role in issuing BUSD.<\/p>\n<p>Against this backdrop <a href=\"https:\/\/forklog.com\/en\/news\/bnb-falls-on-news-of-the-secs-claims-against-paxos\">the price of Binance&#8217;s BNB token<\/a> fell. As of writing, the asset was trading above $280, having lost 11.3% in the last 24 hours (<a href=\"https:\/\/www.coingecko.com\/ru\">CoinGecko<\/a>). Binance founder Changpeng Zhao said that Paxos operates the stablecoin independently.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"723\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/BNBUSDT_2023-02-13_19-40-38-1024x723.png\" alt=\"BNBUSDT_2023-02-13_19-40-38\" class=\"wp-image-197960\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/BNBUSDT_2023-02-13_19-40-38-1024x723.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/BNBUSDT_2023-02-13_19-40-38-300x212.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/BNBUSDT_2023-02-13_19-40-38-768x542.png 768w, https:\/\/forklog.com\/wp-content\/uploads\/BNBUSDT_2023-02-13_19-40-38.png 1190w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Hourly chart of BNB\/USDT on Binance. Data: <a href=\"https:\/\/www.tradingview.com\/symbols\/BNBUSDT\/\">TradingView<\/a>.<\/figcaption><\/figure>\n<p>Paxos is the issuer of BUSD and<a href=\"https:\/\/forklog.com\/en\/news\/paxos-renames-paxos-standard-stablecoin-to-pax-dollar\"> USDP<\/a>, and also <a href=\"https:\/\/www.coingecko.com\/en\/coins\/pax-gold\" target=\"_blank\" rel=\"noreferrer noopener\">\u0441\u0442\u043e\u0438\u0442<\/a> \u0437\u0430 \u0442\u043e\u043a\u0435\u043d\u043e\u043c Pax Gold with a total market value of $488.7 million. The asset is backed by physical gold.<\/p>\n<p>PayPal <a href=\"https:\/\/forklog.com\/en\/news\/bloomberg-reports-paypals-pause-in-developing-a-stablecoin\">paused<\/a> work on its own stablecoin amid news of the Paxos investigation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The infrastructure company and issuer of stablecoins Paxos failed to ensure the safety of BUSD, which could have led to illicit activity. Reuters reported this to the New York Department of Financial Services (NYDFS).<\/p>\n","protected":false},"author":1,"featured_media":74049,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1457,1504],"class_list":["post-74048","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-nydfs","tag-paxos"],"aioseo_notices":[],"amp_enabled":true,"views":"17","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/74048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=74048"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/74048\/revisions"}],"predecessor-version":[{"id":74050,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/74048\/revisions\/74050"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/74049"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=74048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=74048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=74048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}