Regulatory Investigations Compel PayPal to Pause its Stablecoin Project
The latest report from Bloomberg has revealed that the PayPal platform, through it’s PayPal Holdings, is halting its most anticipated stablecoin. This decision is linked to the latest scrutiny of the cryptocurrency industry by the United States government. One such example is the ongoing probing of Paxos by the US government through the NY State Department of Financial Services.
Another credible news source has also reported that the company has been working on this said stablecoin project with the help of Paxos Trust: one of the top stablecoin companies in the United States. PayPal was said to be ready to launch the said stablecoin anytime from next month. But the story emerging from that quarters has revealed that they have halted all the plans till further notice.
Although they did not specify when they wish to continue with the project, there has been speculation that it will be until the US government case with Paxos is over. The Paxos scrutiny started earlier this year after the US regulatory authorities following the massive crackdown on the entire crypto ecosystem.
Paxos is Not the Only Victim
It was stated that Paxos isn’t the only cryptocurrency company under intense investigation by the authorities. Earlier this month, the top cryptocurrency exchange Kraken was under fire by the United States Security and Exchange Commission. According to the report, SEC is on a mission to clamp down on crypto companies operating or developing a staking project.
Investigations gathered that Kraken has agreed to pay the commission a $30M fine and suspend their staking operations. With this development, PayPal, through its spokesperson Amanda Miller, through an official statement, made it clear that even if they should continue with their said stablecoin program, they will abide by the rules of the authorities.
They further explained that their stablecoin program would comply fully with US financial regulations. She also added that the company is still exploring the stablecoin space. From expert analysis, it was discovered that Paxos are not the only ones facing scrutiny by the authorities; PayPal is also having a fair share of the process as they have also been accused of poor customer treatment. One example is customers that mistakenly send funds to the wrong accounts via Venmo.
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