U.S. Securities and Exchange Commission (SEC) scrutiny of evolving digital assets continues. Payments firm PayPal Holdings (NASDAQ: PYPL) on Thursday declared that it had received a subpoena from the U.S. SEC over its recently launched stablecoin PYUSD.
PayPal’s Response To SEC Subpoena
PayPal in its quarterly financial report mentioned that on November 1, 2023, the U.S. SEC Division of Enforcement served them with a subpoena. The commission asked PayPal to produce several documents relating to PYUSD. The payment firm assured complete cooperation with the U.S. SEC regarding the request.
The SEC’s request comes after PayPal became the first major financial technology firm to launch its stablecoin in August. The payment firm recently got registered to offer crypto-assets activities in Britain. This major development occurred when Britain’s market awaited its first set of crypto rules. However, companies looking to offer crypto related services need to showcase that they hold enough safeguards against them being used for illicit money laundering activities.
Is PYUSD The Next BUSD?
It is important to note that PayPal’s PYUSD is issued by Paxos Trust, the same firm that issued Binance USD stablecoin (BUSD). However, the U.S SEC on February 13, 2023, issued a Wells Notice to the Paxos alleging that BUSD was unregistered security after which the New York Department of Financial Services (NYDFS) asked the firm to halt its issuance.
The ongoing approach of the U.S SEC suggests a tough time for the crypto related firms in the country. The Commission has already sued the two biggest crypto exchanges Binance and Coinbase for illegally listing unregistered securities for trading and investment by US investors. Despite facing troubles from the commission, the crypto market has managed to recover and print green indexes. The largest crypto asset Bitcoin (BTC) registered a staggering gain of 36% over the past 60 days.