- A crypto lawyer believes that the NYDFS’ enforcement action against Paxos was motivated by Circle’s complaint last year.
- The lawyer claims that the action may have nothing to do with the security attributes of stablecoins or staking.
- Paxos recently disagreed with the allegations made by the SEC regarding its BUSD stablecoin.
The intensified regulatory crackdown against Paxos and its crypto offerings may not have anything to do with their security status, as claimed by regulators. A lawyer recently took to Twitter to highlight recent developments that may explain the New York Department of Financial Services’ motivation to go after the BUSD issuer.
According to Collins Belton, the real motivation of the New York regulator to initiate the recent actions against Paxos is the Binance pegged BUSD stablecoin and alleged instances of insufficient reserves to fully back the crypto asset. If this is true, then the enforcement actions may have nothing to do with the security attributes of stablecoins or staking as claimed by multiple regulators.
Update: Seems NYDFS real motivation is actually Binance Pegged BUSD and alleged instances of it falling short of fu…