We secured a termination letter and no enforcement action by the SEC

On July 9, 2024, Paxos received a formal termination notice from the SEC, recommending no enforcement action against Paxos following an investigation into the dollar-backed BUSD stablecoin issued by Paxos in partnership with Binance. Paxos, a leading regulated blockchain and tokenization infrastructure platform, launched BUSD in September 2019. While BUSD was backed on a 1:1 basis by high quality dollar-denominated short term assets, the SEC staff threatened in a Wells notice to file an enforcement action alleging that the stablecoin was in fact an investment contract, and therefore, a security. Following our Wells submission and Wells meeting, SEC Enforcement staff decided not to recommend any action against Paxos.

The Davis Polk team included partners Robert A. Cohen, Joseph A. Hall, Fiona R. Moran and Zachary J. Zweihorn, counsel John A. Atchley III and associates Boaz B. Goldwater, Justin Levine and Dan Peck. The members of the Davis Polk team are based in the Washington DC and New York offices.

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