PayPal, a leading global payment platform, is under scrutiny from the US Securities and Exchange Commission (SEC) over its recent release of a US dollar-pegged stablecoin.
In its Q3 financial report filed with the SEC on November 2nd, PayPal disclosed the receipt of a subpoena from the SEC's Enforcement division concerning its PYUSD stablecoin.
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The notice was officially handed over to PayPal on November 1st, demanding certain documentation from the company. When commenting on the subpoena, the company noted:
In response to the SEC's request, we are extending our full cooperation.
This regulatory intervention follows shortly after PayPal introduced the PYUSD stablecoin in early August. Entrusted to Paxos Trust for issuance, PYUSD is backed by assets like US dollar deposits and short-term Treasurys.
Operating on the Ethereum blockchain, PYUSD is tailored to manage digital transactions and support the Web3 framework.
A Paxos spokesperson shared that PYUSD's performance has been admirable. Within two months post-launch, the stablecoin achieved a market capitalization of $150 million. Current figures indicate that PYUSD now boasts a market cap nearing $159 million and a daily trading volume approaching $2.7 million.
PYUSD's trajectory was boosted, with renowned exchanges like Coinbase, Crypto.com, Bitstamp, and Kraken embracing the stablecoin soon after its debut.
Additionally, in September, PayPal revealed plans to add PYUSD to its Venmo mobile payment ecosystem, enhancing user convenience.
However, this move by the SEC showcases the challenges crypto enterprises face in the US. The regulatory body has previously taken legal action against several dominant players in the crypto space, including Coinbase.
The US continues to present a complex landscape for crypto companies. The SEC's latest action against PayPal highlights that navigating the regulatory environment remains a significant challenge for even the most substantial players in the industry.
