Feb 11, 2023
NYDFS Investigates Paxos Trust Company
The New York Department of Financial Services (NYDFS) is reportedly investigating Paxos Trust Company, the New York-based firm behind Binance USD (BUSD) and Paxos Dollar (USDP), according to a Feb. 10 report from Bloomberg. An NYDFS spokesperson declined to comment on ongoing investigations but noted that the department is working to protect consumers from risks associated with investing in the crypto market.
Paxos has been active in the web3 space since 2012, when it launched its digital asset exchange itBit, and was granted a BitLicense by the NYDFS in 2015. BUSD, a U.S. Dollar-collateralized stablecoin, was launched in September 2019 in partnership with Binance. It is currently the third largest stablecoin, with a market cap of over $16 billion. Paxos also created the sixth largest stablecoin, Paxos Dollar (USDP), which has a market cap of $875 billion, as well as PAX Gold (PAXG), a gold-backed-Ethereum token.
Paxos recently refuted rumors that the U.S. Office of the Comptroller of the Currency (OCC) may order Paxos to withdraw its application for its full banking charter, despite the firm only receiving a preliminary approval in April, 2021.
The company claims on its website that its BUSD and USDP token reserves are backed wholly in U.S. Dollars and U.S.Treasuries.
The NYDFS issued a stablecoin guidance report in May, 2022, shortly after the Terra LUNA ecosystem and its failed algorithmic stablecoin TerraClassicUSD (USTC) collapsed. This report was designed to ensure that stablecoin issuers fully back their assets and attest regularly.
In January of this year, Coinbase Global U.S. reached a $100 million settlement with the New York regulator after it was found that Coinbase had failed to look over about 100,000 suspicious transactions from customers who opened accounts without sufficient background checks.
If reports of the investigation into Paxos are true, it wouldn’t be the first one initiated by the NYDFS over the last year.
Cointelegraph reached out to Paxos and Binance to comment on the matter, but did not receive an immediate response.
As the web3 space continues to grow, the importance of NFTs and crypto-assets is becoming increasingly apparent. NFTs, or non-fungible tokens, are digital assets that are unique and cannot be replicated. They are used to represent ownership of digital items such as artwork, collectibles, and even gaming assets.
To capitalize on the potential of NFTs, companies are increasingly turning to NFT marketing and promotion strategies. As a result, a new industry of NFT marketing agencies is emerging, offering services such as Twitter NFT marketing and other promotional activities.
Paxos is a leader in the web3 space, and its products are increasingly being used as a means of selling NFTs. Its BUSD and USDP tokens are backed by USD and US Treasuries, and its PAX Gold (PAXG) token is backed by gold. Paxos is also the founder of PAX Gold (PAXG), a gold-backed-Ethereum token.
Paxos is a trusted name in the web3 space, and its products are increasingly being used as a means of selling NFTs. As the industry continues to grow, it is becoming increasingly important for companies to engage in NFT marketing and promotion strategies. Paxos is leading the way in this regard, and its products are helping to make the sale of NFTs easier and more secure.
As the web3 space continues to grow, it is essential that companies remain compliant with regulations. The investigation into Paxos is a reminder of this, and it is important that companies remain vigilant in order to ensure they are compliant with the rules and regulations of the NYDFS.
It is clear that the future of the web3 space will be heavily influenced by NFTs and crypto-assets. As the industry continues to evolve, companies must remain aware of the potential risks associated with investing in the crypto market, and must ensure that their activities are compliant with regulations.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
