Feb 11, 2023
NYDFS Investigates Paxos Trust Company
The New York Department of Financial Services (NYDFS) is reportedly investigating Paxos Trust Company, the issuer of Binance USD (BUSD) and Paxos Dollar (USDP). A source familiar with the matter told Bloomberg that the motive behind the investigation is unclear.
Paxos, a New York-based stablecoin issuer, launched BUSD in 2019 after striking a partnership with Binance. It is currently the third largest stablecoin in the market, with a market cap of over $16 billion. The firm also created the Paxos Dollar (USDP) in 2018, which is now the sixth largest stablecoin with a market cap of $875 billion. PAX Gold (PAXG), a gold-backed Ethereum token, was also founded by Paxos.
The NYDFS issued the firm a “BitLicense” in 2015, granting it the legal permission to conduct digital currency-related activities in the state of New York. Paxos recently denied rumors that the U.S. Office of the Comptroller of the Currency (OCC) may order them to withdraw its application for its full banking charter.
The NYDFS has been actively investigating crypto-related activities in the past year. Coinbase Global U.S. reached a $100 million settlement with the NYDFS in early 2021 after they failed to properly investigate suspicious transactions from customers. Following the collapse of the Terra LUNA ecosystem and its failed algorithmic stablecoin TerraClassicUSD (USTC) in May 2022, the NYDFS published a stablecoin guidance report to ensure stablecoin issuers fully back their assets and attest regularly.
The NYDFS spokesperson declined to comment on the ongoing investigation but noted that the department is working to protect consumers from risks associated with investing in the cryptocurrency market. Cointelegraph reached out to Paxos and Binance to comment on the matter but did not receive an immediate response.
The web3 space is rapidly evolving and with that comes the need for businesses to stay up to date with the latest developments. As such, Paxos has been actively engaged in the promotion of their products and services through NFT marketing. The firm has leveraged Twitter NFT marketing to reach potential customers and to increase their brand visibility. They have also developed a web3 agency to help businesses create NFTs and to promote them effectively.
In addition to their marketing efforts, Paxos has also been focused on selling NFTs. The firm has developed a platform which enables users to easily create and sell NFTs. This platform has been well-received by the community and has helped the firm to increase their NFT sales.
Overall, Paxos has been actively engaged in the web3 space and has developed a number of products and services to help businesses succeed. The firm’s NFT marketing efforts have been successful and have helped to increase their brand visibility. The firm’s platform for creating and selling NFTs has also been well-received and has helped to increase their NFT sales. While the NYDFS investigation is ongoing, it remains to be seen what the outcome will be.
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