Crypto Market Daily Highlights: SEC Targets Paxos and Binance USD

The top ten cryptocurrency index had a gloomy session on Monday. The descent was headed by BNB and MATIC. BTC finished the day below $22,000 for the seventh straight session.

On Monday, there were no US economic indications to inform investors, so attention was focused on the cryptocurrency news sources.

Investors were alarmed by the news that the Securities and Exchange Commission has switched its attention from staking to stablecoins. News of the SEC intending to sue Paxos over the release and listing of Binance USD broke on Monday (BUSD). The company violated investor protection regulations, according to the SEC.

In response to the Wells notice, Paxos issued a statement in which it said that it "categorically disagrees with the SEC staff" since BUSD is not considered a security under federal securities laws. The SEC Wells notification is specific to BUSD exclusively. There are absolutely no further claims against Paxos, to be clear. Paxos has always placed a high priority on protecting its clients' investments.

"BUSD produced by Paxos is always backed 1:1 with US dollar-denominated reserves, completely segregated, and stored in bankruptcy distant accounts," the statement said. On this matter, we will interact with the SEC staff, and if necessary, we are ready to fight vehemently.

Response to SEC Action The CEO of Binance, CZ, said the following in response to Paxos and BUSD: "IF BUSD is declared as a security by the courts, it will have significant consequences on how the crypto business will expand (or not develop) in the countries where it is ruled as such."

"Given the current regulatory uncertainty in some areas, we will be assessing additional initiatives in certain jurisdictions to ensure our users are sheltered from excessive damage," CZ stated in a series of tweets.

Additionally, CZ retweeted a tweet from Miles Deutscher in which Miles presented various reasons in support of the SEC's classification of stablecoins as securities. But given that a STABLECOIN blatantly fails the Howey Test, how on earth can it classified as a security? Nobody has ever purchased BUSD with the goal of making money.

After hearing that Kraken had reached a settlement with the SEC and would be discontinuing its crypto-staking services, the SEC announced its most recent action.

Investor confidence will continue to be weighed down by regulatory uncertainty since the SEC is now targeting stablecoins and crypto staking.