Why Has SEC subpoenaed PayPal

Payment giant PayPal’s stablecoin, PYUSD, has fallen under the scrutiny of the US Securities and Exchange Commission (SEC)

This year, the SEC has been in a full-fledged crackdown mode, targeting the crypto ecosystem. It is fighting lawsuits against various firms, while some crypto businesses had to withdraw their business from the United States.

PayPal Says it Will Cooperate With SEC

According to PayPal’s quarterly report, it has received a subpoena from the SEC regarding its stablecoin tied to US dollars. To clarify, a subpoena is a legal order, that requires a person or an entity to appear in the court, testify, or submit certain documentation needed for proceedings. 

Read more: What Does It Mean To Receive a Wells Notice From the SEC?

PayPal wrote:

“On Nov. 1, 2023, we received a subpoena from the US SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request.”

PayPal launched its stablecoin, PYUSD, in August by partnering with Paxos, the firm that was the issuer of Binance’s stablecoin BUSD.

Then, in September, it released a transparency report showing that the total assets held in custody meet or exceed the token balance. To boost adoption, it partnered with the crypto exchange Crypto.com, making it the preferred exchange for PYUSD.

Read more: What Is a Stablecoin? A Beginner’s Guide

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