CNBC: If the US SEC formally sues Paxos, it will have a significant impact on other stable currencies
On February 20, it was reported that if the United States Securities and Exchange Commission formally filed a lawsuit against Paxos, it would have a significant impact on the stable currency market worth 137 billion dollars. Renato Mariotti, partner of the law firm BCLP, said: “If the SEC accuses Paxos, any other stable currency issuer should register or prepare to fight a lawsuit with the SEC.” Mariotti said: “I believe that the SEC is likely to reach a settlement with Paxos. Paxos acknowledges that BUSD is a kind of security, which leads to other stable currencies to follow and register. However, Paxos may actively sue the SEC, but the cost of doing so will be huge. The litigation will take several years, and the risk of losing to the SEC is very high. The fact that Paxos confronts the SEC will create risks in itself, and may reduce the attractiveness of BUSD to the market.” Mariotti said that another result is that, The SEC may regulate the assets used to support the stable currency and the requirements for digital currency issuance to disclose information to the market.
Interpretation of this information:
The possibility of the United States Securities and Exchange Commission (SEC) filing a lawsuit against stable currency issuer Paxos has caused concern in the market. Renato Mariotti, a partner of the law firm BCLP, explained that such an action would likely result in other stable currency issuers having to register or prepare to fight a lawsuit with the SEC. However, Mariotti predicts that Paxos will likely reach a settlement with SEC, though it may choose to counter-sue, which he warned could be costly and time-consuming. Additionally, such an action may create risks for Paxos and reduce the attractiveness of their stable currency BUSD. Mariotti also highlighted the possibility that the SEC could regulate the assets used to support stable currency, as well as require digital currency issuers to disclose information to the market.
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