New York Regulator Launches Investigation into Stablecoin Issuer Paxos – Binance BUSD in Trouble?

stablecoin giant Paxos Confirmed To be subject to scrutiny by New York financial authorities.

The New York Department of Financial Services (NYDFS) has acknowledged the ongoing investigation.

Binance is known to run USD (Bus), Paxos is the industry leader in stablecoin technology. The offering also includes the native Paxos stablecoin USDP.

It has not been confirmed whether these stable coins are the target of the investigation. NYDFS declined to comment.

paxos is a giant in space, and also operates an exchange – this bit,

This may be what has caught the attention of the authorities, as the SEC forced Kraken to shut down staking features this week.

Another project that may raise eyes is Paxos’ gold-backed cryptocurrency PAXG, A real-world asset (RWA) token that stores gold in London’s Brinks vaults for investors.

PAXG, BUSD and USDP all remain stable at the time of writing.

Paxos under scrutiny after applying for full banking charter

The investigation began after Paxos applied for a full banking charter. Some pundits allege that this has worried the central financial authorities.

US Office of the Comptroller of the Currency (occ) is rumored to have asked Paxos to withdraw the application.

Paxos has categorically denied this.

What we do know is that the OCC granted Paxos a provisional banking charter through 2021. Suggesting this is not against the idea of ​​properly licensing the issuer.

It is also known that Paxos holds a virtual currency license from NYDFS. Known as the Bit License, it also shows that Paxos is complying with ongoing regulations.

Actually, after the Luna ecosystem exploded because of TerraUSD. nydfs Published guidelines for stablecoin issuers to follow. There is no doubt that Paxos viewed these requests as part of its ongoing efforts to secure its full banking charter.

Yet, as regulators prepare to move to legislate the crypto industry this year – markets are on edge. Notably Paxos operates BSD at a time where uncertainty has clouded the Binance exchange.

An extended investigation into Premier Exchange’s flagship stablecoin could spell big trouble for the industry.