Important points:
- The Paxos Trust Company is the issuer of the Binance stablecoin (BUSD) and the Paxos Dollar (USDP).
- The reason for the investigation is still unclear, but the department in charge of the case clarified that extensive work is being done to protect consumers from the risks associated with investing in the cryptocurrency market.
- Notably, the NYDFS granted Paxos the “BitLicense” in 2015, which legally allows companies to conduct digital currency-related activities in New York State.
This Friday it was confirmed that New York regulators began to investigate Paxos Trust Companywho is the issuer of the stablecoin of Binance (BUSD) and Paxos Dollar (USDP).
The reason for the investigation being carried out it’s not clear yet. A NYDFS spokesperson only commented that the department is working extensively to protect consumers from the risks associated with investing in the cryptocurrency market
“The department is in ongoing contact with regulated entities to understand the vulnerabilities and risks to consumers and institutions themselves from the volatility in the cryptocurrency market that we are experiencing.”
Paxos partnered with Binance in 2019 and they jointly launched BUSDa US dollar-pegged stablecoin that currently has a market capitalization of more than 16.100 million dollarsplacing it in the seventh crypto worldwide.
A year earlier, the company had created its own stablecoin called USDP, which has a market capitalization of 877,000 million dollars, being the crypto number 55 in the ranking.
It should be remembered that the NYDFS granted Paxos the “BitLicense” in 2015, that legally allows companies to carry out activities related to digital currencies in the state of New York.
Given rumors of problems with the United States Office of the Comptroller of the Currency (OCC)Paxos clarifies on its website that its reserves of BUSD and USDP are fully backed in US dollars and US Treasury bonds.
The New York State Department of Financial Services began to look more closely at stablecoin issuers after the collapse of Terra Luna and its stablecoin USTC.
