The Securities and Exchange Commission (SEC) has always been on the crypto crackdown on crypto companies and the 2023 crypto crackdown started with Kraken. The SEC accused Kraken of failing to register its sale of the crypto staking program, after which the exchange agreed to shut down the program.
The recent comes with the crackdown on Paxos which is a financial institution and Blockchain. Today, the SEC sued Paxos over the issuance and listing of the stablecoin Bianance USD (BUSD). This decision benefited Tether in terms of market capitalization which peaked.
Tether Records Highest Market Cap
According to the SEC’s claim, the US dollar-backed stablecoin BUSD is a security and Paxos took action against investor protection law after listing it on its platform. Paxos listed BUSD on February 13 and since then BUSD has lost its market capitalization by nearly $2 billion after hitting $14 billion to date.
In contrast, the second-largest stablecoin by market capitalization, USD Coin saw a decline in supply. Its market capitalization fell from $41.29 billion on February 12 to $40.99 billion on February 14. Nonetheless, the USD recovered its $41.30 billion range on Feb. 15 after it was announced that Circle was not involved in any legal action.
Interestingly, the SEC’s crypto crackdown had a positive impact on Tether, with its market capitalization increasing by almost $69 billion.
This was mainly due to investors’ decision to dump BUSD after Paxos suppressed the news and turned to Tether USDT. However, this is a developing story, so I have to pay attention to further development to know the results.