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March 22, 2023 The Daily Hodl

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Breaking: Circle squashes rumors of planned SEC enforcement action

February 14, 2023 Coin Telegraph

Circle

Rumors swirled on Twitter that the stablecoin issuer received a litigation notice from the U.S. securities regulator but a Circle executive rebuffed the claim.

USD Coin (USDC) issuer Circle has denied rumors that it received a "Wells Notice" over its United States dollar-pegged stablecoin.

On Feb. 14, a now-deleted tweet from Fox Business reporter Eleanor Terrett claimed Circle had been ordered by the U.S. Securities and Exchange Commission (SEC) to cease the sale of USDC — due to the stablecoin being an unregistered security.

However, the rumor was swiftly rebuffed by Dante Disparte, Chief Strategy Officer and Head of Global Policy at Circle Pay on Twitter just 15 minutes after Terrett's tweet, noting his firm has not received a Wells Notice.

.@circle has not received a Wells notice. https://t.co/lE74zHVLka
— Dante Disparte (@ddisparte) February 14, 2023

A Wells Notice is a formal notice sent by the SEC informing a recipient that it's planning to bring enforcement actions against them.

In response to Circle's denial, Terrett said she "went with the word of several trusted sources" and apologized for the mistake.

Here is the response from @circle. I went with the word of several trusted sources on this. I apologize for the mistake @ddisparte. https://t.co/NjyD57PDuZ
— Eleanor Terrett (@EleanorTerrett) February 14, 2023

Dante responded to Terrett that her apology is accepted, adding:

"Alas, there is a lot of churn, swirl and rumors informing the market right now."

The original tweet from Terrett has since been deleted. Her account on Twitter was temporarily deleted but has since returned.

Fears of regulatory action against stablecoin issuers have been running high this week after Paxos Trust Company, the issuer of Binance USD (BUSD), confirmed it had received a Wells Notice that alleged it failed to register the offering under federal securities laws.

Asked earlier this week whether Circle had received a similar notice from the SEC concerning USDC, Disparte told Cointelegraph:

“Circle maintains that USDC is a regulated dollar digital currency issued as stored value under U.S. money transmission law.”

“Facts and circumstances in any type of regulatory action like this are all different, as are the structural and regulatory considerations with each of the cryptocurrencies that are in circulation around the world,” he added.

Paxos ‘categorically disagrees’ with the SEC that BUSD is a security

February 14, 2023 Coin Telegraph

Binance

Paxos said it will engage with the US securities regulator on the matter and is prepared to "vigorously litigate if necessary."

Paxos Trust Company has released a statement noting that it "categorically disagrees" with the United States securities regulator which has painted Binance USD (BUSD) as a security.

In the Feb. 13 statement, the BUSD issuer confirmed recent reports that it had received a Wells notice from the United States Securities and Exchange Commission (SEC) over BUSD and its alleged failure to register the offering under federal securities laws.

END/ Paxos remains dedicated to the development of stablecoins, tokenization & #blockchain technology. We’ll continue serving the world’s most respected and established companies to create a more open financial system.
— Paxos (@PaxosGlobal) February 13, 2023

"Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws," Paxos said.

The firm noted it had received the notice on Feb. 3, adding that "there are unequivocally no other allegations against Paxos."

"We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary," it added.

On Feb. 13, New York Department of Financial Services (NYDFS) ordered Paxos to halt the issuance of BUSD.

Following the order, Paxos announced in a Feb. 13 Twitter post it will halt minting new BUSD tokens effective Feb. 21.

3/ Paxos will continue to manage all outstanding BUSD reserves, ensuring all BUSD are always backed 1:1 with US dollar-denominated reserves held in bankruptcy remote accounts.
— Paxos (@PaxosGlobal) February 13, 2023

However, Paxos has said BUSD will remain fully supported and redeemable to onboarded customers through at least February 2024.

"New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust," Paxos said.

New York State's Department of Financial Services, or NYDFS, reportedly received a complaint from stablecoin issuer Circle regarding Binance's reserves prior to its crackdown on BUSD.

Binance CEO Changpeng "CZ" Zhao says the exchange will continue to support BUSD despite issuer Paxos being ordered to stop minting the stablecoin by the U.S. SEC and New York regulators.

wells notice