The company’s stablecoin Paxos, Pax Dollar (USDP), which is offered in Brazil by applications such as Nubank, Mercado Pago and PicPay, may be involved in investigations in a court in New York (US). The same company also issues Binance USD.
According to information circulating in the media, the investigation is being conducted by the New York Department of Financial Services (NYDFS).
While the company is regulated in the United States, the possible verification involves knowing the company’s product offerings.
Stablecoin offered on Nubank, Mercado Pago and PicPay is undergoing investigation in the US
Stablecoins issued by Paxos may be in the middle of an investigation in the US, according to the Coindesk portal. In addition to Pax Dollar, it is also worth remembering that this company issues Binance USD (BUSD).
However, it is still publicly unclear what the NYDFS has been looking at regarding the issuance of the stablecoins. When members of the public body were contacted by the report, they declined to comment on the matter.
For example, in Brazil, the Pax Dollar currency is listed in Paxos partner apps, such as Nubank, Mercado Pago, and PicPay. None of the companies has publicly commented on the matter.
In 2022, the cryptocurrency market saw the fall of the stablecoin TerraUSD (UST), which hurt investors. For instance, the stablecoin market is undergoing a global risk assessment, with regulators keeping an eye on industry launches.
One of the demands the industry could make is that companies issuing stablecoins keep customer assets separate from the company. In addition, pressure is being felt globally for algorithmic stablecoins not to operate in the market.
Paxos calls possible problems with the OCC a rumor
As a regulated company, Paxos has emerged in the media with another issue besides the investigation of its stablecoin offering. This is because, according to rumors, Paxos could soon lose its license to operate a bank in the US, which it got in April 2021.
In a note via Twitter last Wednesday (8), Paxos denied problems with the US currency controller, the Office of the controller of the currency (OCC). This is a public body affiliated with the US Treasury Department.
“To clarify the speculation, Paxos has not been asked to withdraw its application for a national trust bank license from the OCC, nor has the license been denied. Paxos continues to work constructively with the OCC.”
To clarify speculation, Paxos has not been asked to withdraw its application for a charter of a national trust bank with the OCC, nor has the charter been denied. Paxos continues to work constructively with the OCC.
— Paxos (@PaxosGlobal) February 8, 2023
On what he called speculation, the Paxos company continues to operate normally in all countries where it provides its services.
In any case, an expert recently stated that the US is trying to ban the cryptocurrency market, even if without much fanfare.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
