Paxos Trust Co., a crypto company based in New York, has recently been the subject of an investigation by the New York State Department of Financial Services (NYSDFS). The exact scope of the investigation is unclear, however, Paxos has denied any rumors that its application for a national trust bank charter has been withdrawn or denied. The company has also affirmed that they are in constant communication with the OCC and the NYSDFS.
The investigation may be related to Paxos’ own USD-backed stablecoin, its gold-backed cryptocurrency, or its crypto exchange, itBit. Binance, which runs Paxos’ BUSD stablecoin, has also commented on the situation, affirming that BUSD is one of the most transparent stablecoins in existence and is fully backed.
It is important to note that an investigation does not necessarily mean any wrongdoing has occurred, and can actually be seen as proof of a company’s strict adherence to the rules. Paxos and Binance have remained tight-lipped on the subject of the investigation and will likely continue to do so unless absolutely necessary.