In the words of the spokesperson for the NYDFS, “The department is in continuous contact with regulated entities to understand vulnerabilities and risks to consumers and the institutions themselves from crypto market volatility we are experiencing.”
Stablecoin issuer Paxos is being probed by the New York Department of Financial Services (NYDFS).
Earlier this week, Paxos refuted rumors about the stablecoin issuer being asked to withdraw its application for a national trust bank charter from the Office of the Comptroller of the Currency (OCC).
The details of the investigation remain sparse as Paxos and the NYDFS have refused to comment on the probe. The stablecoin issuer possesses a BitLicense (virtual currency license) issued by the NYDFS.
Besides issuing Binance USD (BUSD), Paxos also issues its own USD-backed stablecoin, Paxos Dollar (USDP).
Binance had earlier commented that BUSD is “one of the most transparent stablecoins in existence,” noting that the token is backed on a 1:1 ratio. Binance also claimed that it will keep monitoring the situation concerning Paxos.
Meanwhile, rumors have emerged that regulators may send Wells notices to exchanges and stablecoin issuers in the coming days. Sources claim that Circle, the issuer of USD Coin (USDC), could come under regulatory scrutiny by the authorities.
