Unchained The Chopping Block: The SEC Is Attacking Crypto – Will Gary Gensler Succeed? - Ep. 456
Feb 15, 2023
Joining the discussion is Marc Boiron, Chief Legal Officer at Polygon, who delves into the SEC's enforcement actions against stablecoins and how they could reshape the crypto landscape. He shares insights on the implications of the SEC's moves against Paxos and the nuances of classifying stablecoins as securities. The conversation also touches on Kraken's staking settlement and its potential ripple effects on the industry. Overall, Marc emphasizes the need for clear guidelines amidst regulatory chaos to foster innovation in the crypto space.
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NYDFS Focus on Paxos-Binance Relationship
- The NYDFS is focusing on Paxos's relationship with Binance and their responsibility for BUSD's use.
- Paxos's lack of control over BUSD on BSC, where Binance did large-scale wrapping, is key.
SEC's Potential Argument for BUSD as Security
- The SEC might argue BUSD is a security like a note or certificate of deposit, not an investment contract.
- This is difficult to understand, given BUSD's broad distribution and existing regulatory regimes.
Stablecoins as Money Market Funds?
- Gensler hinted stablecoins might be securities if they pay interest directly or indirectly, like money market funds.
- Binance's "Earn" product, where BUSD earns interest, could be used for that argument.