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The SEC plans to sue Paxos Trust Co. for violation of investor protection laws.
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The regulator has issued a Wells Notice to Paxos.
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The notice alleges that Binance USD is an unregistered security.
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The accused has 30 days to respond to the notice via a legal brief.
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An SEC spokesperson declined to comment on the matter.
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Binance USD is a Paxos issued and owned product.
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Paxos is regulated by the New York Department of Financial Services.
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Binance USD is a 1 to 1 backed stablecoin.
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Stablecoins provide a safety net for investors seeking refuge from volatile markets.
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Binance will continue to monitor the situation and provide a wide array of stablecoin options to users.