Paxos has secured a landmark regulatory milestone, becoming the first blockchain-native company to receive clearing agency registration from the US Securities and Exchange Commission, a breakthrough that opens the door for blockchain technology to sit at the heart of Wall Street’s trade settlement infrastructure.
Paxos Securities Settlement Company, a subsidiary of the broader Paxos platform, has been approved as a central securities depository in the United States, the only blockchain-based firm to hold this status. The company described the approval as a “critical piece of financial market infrastructure” as blockchain and traditional capital markets continue to converge.
What a clearing agency does, and why this matters
Clearing agencies are the behind-the-scenes infrastructure that make securities markets function. When stocks are bought and sold, buyers and sellers do not interact directly, clearing and settlement providers verify the trade, match the counterparties, and ensure the physical exchange of cash and securities takes place correctly and without error.
Until now, this critical function has been handled exclusively by traditional financial institutions. Paxos’s SEC registration means banks and brokerages can now build crypto-based settlement infrastructure within a fully regulated framework, with a blockchain-native counterparty at the centre.
Seven years in the making
The approval follows a seven-year regulatory journey. In October 2019, the SEC issued a no-action letter permitting Paxos to pilot a blockchain-based settlement service for US equities. The service launched in February 2020 and ran a successful pilot with several major financial institutions, demonstrating that blockchain-based post-trade infrastructure could deliver same-day settlement while reducing costs and improving operational efficiency.
“Our clearing agency registration is the result of seven years of work with the SEC,” said Paxos co-founder and CEO Charles Cascarilla. “Beginning with our No-Action Letter in 2019 and the settlement pilot we operated with some of the world’s largest and most sophisticated financial institutions.”
A complicated history with regulators
The approval also marks a significant reversal in Paxos’s relationship with the SEC. Under former chair Gary Gensler, the agency issued a Wells Notice to Paxos in 2023, threatening enforcement action over the issuance of Binance USD (BUSD), a stablecoin the SEC considered an unregistered security. The New York Department of Financial Services simultaneously ordered Paxos to stop minting new BUSD.
The SEC formally closed its investigation in 2024 and issued a termination notice confirming no enforcement action would be taken. Paxos also reached a $48.5 million settlement with NYDFS in August 2025 over BUSD compliance issues.
With that chapter closed, Paxos has emerged as one of the most comprehensively regulated crypto infrastructure firms in the US, holding an OCC national trust company conditional approval alongside its new SEC clearing agency status.
Stablecoin issuer turned market infrastructure provider
Paxos is already the issuer of several regulated digital assets, including PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG). The clearing agency registration adds a new and fundamentally different dimension to the company’s role, moving it from asset issuance into the critical plumbing of US capital markets.
The move fits within a broader pattern of blockchain infrastructure steadily earning regulatory legitimacy at the highest levels of US finance, from OCC trust charters to SEC-registered clearinghouses, the pieces of a regulated digital asset financial system are visibly falling into place.
