AssetsFeb 15, 2023

The issuer of USD Coin (USDC) says it has not received a notice from the SEC

Circle decided to deny rumors that the US regulator is attacking its stablecoin.

After Paxos confirmed the claims of the United States Securities and Exchange Commission (SEC) regarding the "stable" virtual currency Binance Coin (BUSD), there was considerable concern in the cryptocurrency community. The US authority stated that in its opinion, the stablecoin is a security and should be registered in accordance with federal regulations. As if that wasn't enough, rumors began to circulate that Circle, which manages USD Coin (USDC), received a similar notice. However, the company denied these rumors.

The USDC issuer says it has not received a notice from the SEC

An American government agency has taken another cryptocurrency project on its radar. This time, the agency notified Paxos, claiming that the BUSD stablecoin issued in cooperation with the Binance exchange is in fact a security. The SEC has determined that under applicable federal regulations, this digital currency should be registered prior to sale.

In the aftermath of these events, there was uncertainty in the cryptocurrency community. Some began to assume that this is just the beginning of the problems, and the US commission will also hit other stablecoins. Following these concerns, rumors have spread among investors that Circle has received a similar notice. However, the USDC issuer denied them.

Dante Disparte, Director of Strategy and Global Policy Manager at Circle Pay, spoke about the matter. In response to a tweet by a Fox Business reporter, he replied that his company had not received any communication from the SEC.

A U.S. government agency sends a Wells formal notice to companies when it plans to take enforcement action against them.

Paxos intends to cooperate with the US regulator

The company issuing BUSD stressed that this stablecoin should under no circumstances be qualified as a security. Although the company that created the stablecoin categorically disagrees with the opinion issued by the SEC, it intends to cooperate with the US regulator to clarify the whole matter. It also does not rule out going to court.

Paxos decided to additionally comply with the order to stop minting new BUSD coins. At the same time, company representatives emphasized that this stablecoin has a total coverage of 1:1, and its holders can exchange it for US dollars or Pax Dollars (USDP). The stoppage of minting will take place from February 21 this year, according to the official press release. It is worth noting that the Binance cryptocurrency exchange intends to continue supporting BUSD.