Blockchain infrastructure platform and stablecoin issuer Paxos announced on May 29 that its subsidiary, Paxos Securities Settlement Company, has been approved by the U.S. Securities and Exchange Commission (SEC) to become the United States’ only “blockchain-native” Central Securities Depository (CSD) clearing agency, capable of providing clearing and settlement services within the United States.
Seven-year cooperation timeline: from no-action letter to clearing-entity approval
In October 2019, the SEC issued a No-Action Letter to Paxos, allowing a pilot of blockchain-based U.S. stock settlement services; in February 2020, the pilot services were officially launched.
Paxos stated that the pilot program proved that post-trade infrastructure based on blockchain can achieve same-day settlement within a fully regulated framework, reduce costs, and improve operational efficiency.
Paxos’ official statement said that this approval represents a “critical component of financial market infrastructure,” and removes regulatory barriers for banks and brokerages to build infrastructure based on cryptocurrencies.
Paxos’ confirmed regulatory history
During the tenure of former SEC chair Gary Gensler, Paxos received a Wells notice from the SEC in 2023. The SEC planned to take enforcement action regarding the issuance of BUSD (Binance USD stablecoin), determining that it was an unregistered security.
In the same year, the New York State Department of Financial Services (NYDFS) ordered Paxos to stop issuing new BUSD. In 2024, the SEC concluded its investigation and issued a formal termination notice, confirming that it would not pursue enforcement action. In August 2025, Paxos reached a $48.5 million settlement agreement with NYDFS regarding compliance issues related to Binance and BUSD.
FAQ
What specific functions does the approved clearing agency provide?
The clearing agency is responsible for verifying securities trades, matching buy and sell counterparties, and ensuring that the actual exchange of funds and securities is correct, so that buyers and sellers do not need to trade directly. After Paxos Securities Settlement Company is approved as a CSD clearing agency, it can provide blockchain-based clearing and settlement services within a fully regulated framework.
How is this SEC approval related to Paxos’ previous BUSD regulatory controversy?
The SEC formally terminated its investigation into Paxos’ issuance of BUSD in 2024, and Paxos also reached a $48.5 million settlement with NYDFS in August 2025. This clearing-agency approval was an official qualification recognition after the above regulatory dispute was fully resolved.
What stablecoins and digital assets does Paxos currently issue?
According to the company’s official materials, Paxos currently issues products including PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG).
