The shocking revelations of a former Paxos executive on regulators

Recent criticism from Jesse Austin Campbell, former head of portfolio management at Paxos, has shed light on the regulatory gaps in the crypto space. According to him, regulators have failed to prevent the various collapses and are now looking for ways to block access to cryptocurrencies.

Regulatory Gaps in the Crypto Universe: A Critical Look from an Expert

Paxos is one of the crypto companies that is currently under the radar of regulators. The United States Securities and Exchange Commission (SEC) recently issued a warning to the stablecoin issuer. This concerns the alleged sale of an unregistered security, the Binance USD (BUSD) stablecoin.

According to the regulator, the stablecoin would not be backed by the US dollar. Paxos denied the claims, saying the stablecoin was indeed backed by the US dollar. The company also said it is ready to take the matter to court if necessary.

Campbell said during Wednesday’s episode of “First Mover” on CoinDesk TV that:

“Regulators in general have failed to adequately deal with Celsius Network, Terra and FTX, and are now attacking every on-ramp they can to try and reduce access to the system”

He further states that federal banking regulators are taking similar approaches. They are developing policies to restrict the access of crypto companies to the banking system.

Are Regulators Disadvantaging Onshore Regulated Crypto Firms?

The New York Department of Financial Services contacted Paxos, which led to the company ceasing the issuance of the BUSD token. He reported unresolved issues regarding oversight of Paxos’ relationship with Binance. In response, Paxos announced that it was ending its relationship with the exchange.

The platform held over $16 billion in BUSD tokens. However, she started burning them on Monday, when she indicated she was no longer hitting them.

The former Paxos employee pointed out that the firm’s crackdown demonstrates that regulators are stigmatizing onshore-regulated crypto businesses.

“You are the ones who are constantly being punished, fined and harassed, even though you are not the ones who lost users’ money,” he said of licensed companies like Paxos.

Growing regulatory controversy surrounds stablecoins. In fact, more and more critics are pointing the finger at the inability of regulators. In this context, Jesse Austin Campbell, also points out the differences in treatment between companies licensed in the United States and offshore companies like Tether.

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