Payment giant PayPal has received a subpoena from the United States Securities and Exchange Commission (SEC) regarding its U.S. dollar-pegged stablecoin.
The Enforcement division of the SEC has sent a subpoena to PayPal related to its PayPal USD (PYUSD) stablecoin, the firm disclosed on Nov. 2, according to a report by Reuters.
The action comes about three months after PayPal launched its PYUSD stablecoin in early August. The stablecoin is issued by Paxos Trust and backed by U.S. dollar deposits, short-term Treasurys and similar cash equivalents. PYUSD is based on the Ethereum blockchain and is aimed at handling digital payments and Web3.
According to a spokesperson for Paxos, PYUSD has seen a successful rollout so far, reaching a $150 million market capitalization in just two months since its launch. At the time of writing, the market cap of PYUSD is valued at about $159 million, with $2.7 million of daily trades, according to data from CoinGecko.
PayPal and Paxos did not immediately respond to Cointelegraph’s request for comment.
The sharp rise in the adoption of PayPal USD came amid major exchanges like Coinbase, Crypto.com, Bitstamp and Kraken listing the stablecoin on their platforms soon after its launch. In September, PayPal announced the upcoming integration of the PYUSD stablecoin into Venmo mobile payment service, allowing users to purchase PYUSD and send it to friends and family.
Apart from aggressively moving into crypto in the United States, PayPal has been also progressing with crypto initiatives in other countries. On Oct. 31, PayPal received a license from the United Kingdom Financial Conduct Authority to offer crypto services in the country.
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The latest SEC action against PayPal is yet another evidence that the U.S. government doesn’t welcome crypto-related businesses much. The regulator has serially sued some of the largest local companies in the industry, including the ongoing lawsuit against Coinbase exchange. In October 2023, the SEC finally moved to dismiss its three-year lawsuit against Ripple, a company behind XRP (XRP), one of the largest cryptocurrencies by market cap.
In April 2023, Circle CEO Jeremy Allaire argued that a cryptocurrency crackdown by U.S. regulators has been a significant factor behind the declining market capitalization of Circle’s USDC (USDC) stablecoin.
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