In a recent development, PayPal, the payment giant, has come under the watchful eye of the US Securities and Exchange Commission (SEC). This regulatory scrutiny is part of the SEC’s aggressive stance this year, with a focus on tightening regulations within the crypto ecosystem. Several crypto firms have faced legal battles, leading some to withdraw their operations from the United States.
According to PayPal’s quarterly report, the company has been served with a subpoena from the SEC concerning its stablecoin, PYUSD, which is pegged to the US dollar. A subpoena is a legal order mandating an individual or entity’s presence in court, requiring them to testify or submit specific documents crucial for legal proceedings.
PayPal confirmed the situation in a statement:
“On Nov. 1, 2023, we received a subpoena from the US SEC Division of Enforcement related to PayPal USD stablecoin. The subpoena demands the production of documents, and we are fully cooperating with the SEC in this matter.”
PYUSD’s Journey: Launch, Transparency, and Partnerships
PayPal introduced its stablecoin, PYUSD, in August through a collaboration with Paxos, the same firm responsible for issuing Binance’s stablecoin BUSD. Following the launch, PayPal demonstrated transparency by releasing a report confirming that the total assets held in custody align with or surpass the token balance.
To encourage adoption, PayPal partnered with Crypto.com, a prominent crypto exchange, making it the preferred platform for PYUSD transactions. However, with the SEC’s recent subpoena, the future of PYUSD hangs in the balance, pending the outcome of the regulatory investigation.