BUSD stablecoin issuer Paxos has terminated its relationship with Binance as it engages in conversations with the U.S. Securities and Exchange Commission (SEC) over a recent Wells notice.
Paxos CEO Charles Cascarilla confirmed that the stablecoin issuer ended the relationship with Binance due to misaligned goals. According to an internal email viewed by Axios, the person in charge of Paxos said that the market has changed and the relationship with Binance no longer aligns with their current strategic focus.
He added that while NYFSD recently ordered Paxos to cut ties with Binance and stop casting Binance’s BUSD stabilizer, the decision has nothing to do with the recent regulatory shake-ups by the New York Department of Financial Services and the SEC. At the same time, the US Securities and Exchange Commission issued a Wells notice to the company, saying BUSD was an unregistered security in the institution.
According to NYFSD instructions, investors have redeemed $2.8 billion worth of BUSD through Paxos. Decentralized exchange Curve showed an influx of BUSD and a reduction in Tether liquidity as investors dumped the Binance-branded coin.
Despite the findings of the agency’s investigation, the stablecoin issuer also held private discussions with the SEC. Cascarilla assured BUSD holders that Paxos will be redeemed at least before February 2024.
Paxos in Talks With SEC Over BUSD Allegations
According to Reuters, Paxos CEO Charles Cascarilla said the company is in “constructive discussion” with the US Securities and Exchange Commission and will continue to speak privately. The report was issued following the stablecoin issuer’s lawsuit for the United States Securities and Exchange Commission. The regulator claimed BUSD was an unregistered security in the lawsuit.
According to reports, Cascarilla said that the stablecoin issuer will defend his Busd’s position through litigation. On Feb. 13, the New York Department of Financial Services- Paxos is licensed in the U.S. state ordered the company to stop the issuance of BUSD. The firm announced that it would halt minting of the stablecoin starting Feb. 21.
A spokesman for the U.S. Securities and Exchange Commission added that he would not comment on whether there is a possible investigation into the stablecoin issuer, but the regulators’ actions are the latest in a string of cryptocurrency law enforcement agencies. The SEC announced on Feb. 9 it reached an agreement with Kraken that agreed to hire US customers and plans US customers and paid $30 million.