PayPal receives SEC subpoena over stablecoin

PayPal, in a 10-Q, disclosed the subpoena, which it received Thursday

article-image

Robert Way/Shutterstock, modified by Blockworks

share

PayPal disclosed that it received a subpoena from the Securities and Exchange Commission’s division of enforcement on Wednesday.

The extent of the subpoena is unclear, though PayPal noted that the regulator is seeking documents, and it is actively cooperating with the subpoena.

“The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request,” PayPal said in a form 10-Q.

PayPal launched its stablecoin back in August, marking the first foray into dollar-backed stablecoins by a traditional finance firm. 

The stablecoin is issued on Ethereum by Paxos Trust Co. A monthly reserve report on the stablecoin is also handled by Paxos, alongside an “attestation of the value of PayPal USD reserve assets.”

While the stablecoin initially received some praise, some in Washington also took a more critical view on the launch.

House Democrat Maxine Waters D-Cali. said she was “deeply concerned” about the new stablecoin in August.

She added that there needs to be “federal guardrails” on any “issuance of a new form of money.”

Chair of the House Financial Services Committee Patrick McHenry R-NC said that PayPal’s announcement was a “clear signal that stablecoins — if issued under a clear regulatory framework — hold promise as a pillar of our 21st-century payments system.”

McHenry’s committee passed the bipartisan Clarity for Payment Stablecoins Act, which “identifies regulatory paths for approving and regulating stablecoin issuers.”

The Democrats and Republicans struggled with the bill in markup, leading to politicians engaging in a shouting match in July.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

recent research

Blinks Report Image.png

Research

Blinks enable the ability to vampire attack user monetization of existing networks by inserting onchain and financialized functionalities directly within the popular social feeds and digital experiences of today.

article-image

Plus, how the FTX collapse played out in Asian countries

article-image

Kalshi founder Tarek Mansour said Thursday marked the “the first trade on regulated election markets in nearly a century”

article-image

I was excited about being on the precipice of realigning societal incentives and solving many issues plaguing our modern financial world

article-image

Cypherpunk Holdings has rebranded to Sol Strategies in a pivot to a Solana-first investment approach

article-image

BitGo’s wrapped bitcoin (wBTC) has a new custodial challenger

article-image

Make no mistake: Tether makes a ton of money. But exactly how much depends a lot on the price of bitcoin.