For the American financial and stock market regulatory agencies, 2023 is the year of increased control of operations. Since the beginning of this year, revelations of investigations directed against crypto firms have multiplied. More than ever, protecting users from the bear market seems to be at the heart of their business. Paxos is now in the sights of the authorities.
We do not know the reason for the investigations on Paxos
An anonymous source noted Thursday, February 9 that blockchain tech firm Paxos Trust Company is reportedly under investigation. Investigations led by the New York Department of Financial Services (NYDFS).
So far, we do not know the reason for this potential investigation of Paxos. When questioned, a representative of the New York regulator spoke, without however communicating on the ongoing investigation. According to his explanations, the NYDFS works to protect users of crypto platforms from market volatility.
“The department is in constant contact with the entities in good standing, to understand the vulnerabilities and risks to consumers, and the institutions themselves, from the crypto market volatility we are experiencing”did he declare.
If the information is confirmed, it would be the very first investigation launched by the regulator in the space of a year.
An investigation related to recent events?
We know that recently, some rumors related to the Office of the Comptroller of the Currency (OCC) of the United States have circulated on Paxos. This, after Paxos initiated a procedure with the OCC, in order to obtain authorization to become a chartered bank. This would have allowed the company to integrate into its activities the protection of deposits and the granting of loans. Comments indicating that the OCC would block the procedure then emerged. Reviews refuted by the company.
Moreover, one can think that the possible investigations against Paxos could have a link with questionable operations. We know that in January, the exchange Coinbase Global US concluded an arrangement of 100 million with the New York regulator. The arrangement was agreed by the company to disengage from a 100,000 neglected suspicious transaction case.
In any case, investigations directed against crypto companies will multiply in the coming weeks. Protecting users seems to be the leitmotiv of regulators as the bear market continues to do damage.
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