PayPal has come under the lens of the United States Securities and Exchange Commission (SEC). A detailed review of PayPal’s financial activities related to its U.S. dollar-pegged stablecoin has been initiated. This was revealed in PayPal’s Q3 financial report submitted to the SEC on November 2.
The SEC’s Enforcement division issued a subpoena to PayPal on November 1, demanding the company to furnish certain documents. PayPal, in its official statement, has expressed its willingness to cooperate with the regulatory body.
The scrutiny arrives shortly after the introduction of PayPal’s PYUSD stablecoin in early August, a digital currency anchored to the U.S. dollar. Managed by Paxos Trust, PYUSD boasts a solid foundation. U.S. dollar deposits and short-term Treasury bonds back it. Crafted on the Ethereum blockchain, PYUSD is designed to facilitate digital transactions and embrace the burgeoning Web3 space.
The new stablecoin has witnessed a remarkable reception, amassing a market capitalization of $150 million within two months of its debut. As of the latest update, PYUSD’s market capitalization stands at an impressive $159 million, with a daily trading volume nearing $2.7 million.
This surge in popularity can be attributed to major cryptocurrency exchanges like Coinbase, Crypto.com, Bitstamp, and Kraken promptly listing PYUSD on their platforms. Further bolstering its reach, PayPal announced plans to integrate PYUSD into Venmo, its mobile payment service. This move will enable Venmo users to purchase PYUSD and seamlessly transfer it to their contacts.
Beyond its crypto endeavors in the U.S., PayPal is expanding its footprint internationally. Notably, on October 31, the company secured a license from the United Kingdom’s Financial Conduct Authority to provide crypto services.
The SEC’s latest action against PayPal underscores the challenging regulatory environment for crypto firms in the U.S. The regulatory body has taken legal action against several prominent U.S. crypto entities, including a lawsuit against Coinbase exchange. In a notable move, the SEC concluded its three-year lawsuit against Ripple in October 2023.
The post Surprise Surprise: PayPal Stablecoin Ventures Under SEC Scrutiny appeared first on CryptoMode.
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