- Paxos issues two of the 6 biggest stablecoins
- The regulator probed Coinbase in January
Paxos Trust Company, which issues the Paxos Dollar (USDP) and Binance USD (BUSD), is being probed by the New York Department of Financial Services (NYDFS), insiders reported. The company is based in New York. The reason for the investigation is currently unclear.
“Protecting” consumers from risk
The watchdog did not comment on the ongoing probe, but pointed out that it was making an effort to protect consumers from the risks of buying and selling cryptocurrency.
The NYDFS granted a license to Paxos in 2015, with which the stablecoin issuer could legally conduct crypto-related activities in the state.
Paxos application for banking charter withdrawn?
Rumors are also circulating that the Office of the Comptroller of the Currency has requested that Paxos withdraw its application for a full banking charter. Paxos refuted these rumors. The company was granted preliminary approval for this less than two years ago.
BUSD is the third-largest stablecoin, USDP – the sixth
Following a partnership between Paxos and Binance, which was concluded in 2019, Paxos started issuing BUSD. Its current market cap exceeds $16 billion.
Paxos launched the Paxos Dollar (USDP) in 2018. Its market cap is about $875 million according to CoinMarketCap. Paxos claims these tokens are fully backed by US dollars and US treasuries.
Paxos created PAX Gold (PAXG), an Ethereum token backed by gold. In 2012, Paxos Trust Company also founded itBit, a digital asset exchange. Paxos was created that same year.
Second probe of a leading exchange this year
If the probe really is fact, it would be the second one into a leading exchange that the NYDFS has initiated over the past year. The regulator and Coinbase’s US arm reached a $100 million settlement on January 4.
Allegedly, Coinbase had overlooked about 100,000 suspicious transactions, carried out by customers who had been allowed to create accounts without undergoing adequate background screening.
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