### The suspension was instituted as a result of the Securities and Exchange Commission (SEC) filing a lawsuit against Paxos and an ongoing investigation by the New York State Department of Financial Services (NYDFS).

PayPal announced in late 2021 that it was partnering with Paxos to create a stablecoin. The stablecoin project is expected to be used as a medium of exchange on the PayPal platform, allowing users to transfer funds to each other quickly and inexpensively, while avoiding the volatility that is associated with other cryptocurrencies.



However, this was put on hold as the SEC is currently suing Paxos due to the fact that the issuance of Binance’s stablecoin, the BUSD, are considered to be securities. The regulatory uncertainties surrounding the situation likely led PayPal to take a cautious approach and suspend the project until the legal and regulatory issues were resolved.



Paxos has challenged these claims, arguing that its stablecoins are not securities because they are pegged to real-world assets and have a stable value. The company has also argued that it has taken steps to ensure compliance with all applicable laws and regulations.


 <blockquote className="twitter-tweet"><p lang="en" dir="ltr">END/ Paxos remains dedicated to the development of stablecoins, tokenization &amp; <a href="https://twitter.com/hashtag/blockchain?src=hash&ref_src=twsrc%5Etfw">#blockchain</a> technology. We’ll continue serving the world’s most respected and established companies to create a more open financial system.</p>— Paxos (@PaxosGlobal) <a href="https://twitter.com/PaxosGlobal/status/1625091942252965889?ref_src=twsrc%5Etfw">February 13, 2023</a></blockquote>


Whether the stablecoin project with Paxos will resume in the future depends on the outcome of the SEC complaint and the NYDFS investigation, which are both ongoing at the moment. However, this circumstance emphasizes the necessity for consistency and clarity in cryptocurrency regulation as well as the possible difficulties that businesses may encounter as they investigate the usage of digital currencies and blockchain technology.

The suspension was instituted as a result of the Securities and Exchange Commission (SEC) filing a lawsuit against Paxos and an ongoing investigation by the New York State Department of Financial Services (NYDFS).

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