Paypal Faces SEC Scrutiny Over New Stablecoin PYUSD, Cooperates With Document Production Request
After releasing its new stablecoin PYUSD, the payments giant Paypal disclosed that the U.S. Securities and Exchange Commission (SEC) subpoenaed the company concerning the stablecoin. Paypal stated in its Form 10-Q for the third fiscal quarter that it had been asked to produce documents for the SEC and is “cooperating” with the securities regulator.
Paypal Subpoenaed by SEC Over PYUSD Token
Paypal is engaged with the SEC in matters related to its stablecoin asset PYUSD. This information came to light in the company’s latest financial disclosure, showcasing the firm’s third-quarter earnings.
“On November 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to Paypal USD stablecoin,” the filing notes. “The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request.”
The filing also notes that Paypal allows its customers to buy, hold, sell, convert, receive, and send bitcoin, ethereum, bitcoin cash, litecoin, and the PYUSD stablecoin. Additionally, the document details that in August 2023, Paypal partnered with the third-party issuer Paxos to issue PYUSD, subsequently launching it for Venmo customers in September 2023.
“We have selected custodian partners and the PYUSD Issuer, and may in the future select additional custodian partners and stablecoin issuing entities, that are subject to regulatory oversight, capital requirements, maintenance of audit and compliance industry certifications, and cybersecurity procedures and policies,” the 10-Q filing adds.
The Paypal earnings report follows the company receiving approval from the Financial Conduct Authority in the United Kingdom. After recently pausing crypto purchases in the U.K., it is expected that Paypal will resume services following the regulatory approval. However, the company may not be able to add new customers moving forward.
What do you think about Paypal getting probed by the SEC over its new stablecoin PYUSD? Share your thoughts and opinions about this subject in the comments section below.
