The post Stablecoin Scandal: SEC Probes Potential Violations of Investor-Protection Laws appeared first on Coinpedia Fintech News
The US Securities and Exchange Commission (SEC) is investigating whether stablecoins are among the products that were issued in violation of investor-protection laws.
The SEC enforcement lawyers have told Paxos Trust Co. that regulators plan to take enforcement action over its stablecoin, BUSD, and have pushed the company into making the decision to stop minting BUSD indefinitely.
The scandal against the third-largest stablecoin by market value was a significant jolt to an industry that has already suffered a series of shocks in recent months.
Stablecoins and the SEC
Stablecoins are a form of cryptocurrency that makes it easier to trade other digital assets. Each unit is supposed to maintain a value of $1. Regulating them could take the SEC into the domain of overseeing payment products, something it doesn’t do.
The SEC could allege that BUSD is secu
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