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PayPal is facing regulatory scrutiny from the United States Securities and Exchange Commission regarding its U.S. dollar-pegged stablecoin, PayPal USD ($PYUSD).
This came to light in PayPal’s Q3 financial report, which revealed that the Securities and Exchange Commission (SEC) Enforcement division had issued a subpoena to the company. The subpoena, dated November 1, requested that PayPal provide specific documents, and the company has stated that it is cooperating with the SEC’s request. This regulatory action follows PayPal’s launch of PYUSD at the beginning of August.
The SEC’s move against PayPal points to rising challenges that cryptocurrency firms face in the United States in the the changing regulatory environment The Commission has initiated lawsuits against several prominent domestic crypto companies, including Coinbase. The SEC also recently moved to dismiss its three-year-long lawsuit against Ripple.
A changing regulatory landscape for cryptocurrency firms
The regulatory landscape in the industry has been evolving rapidly, forcing cryptocurrency firms to navigate shifting compliance and cooperation. Despite the challenges the SEC’s actions might introduce, the regulations also reflect more attention towards the growing cryptocurrency sector marking the rise in adoption and interest in the space.
Despite the fact that the SEC is looking into the stablecoin, PYUSD has seen a quick uptake from trading exchanges and currently boasts a market cap of approximately $159 million with significant daily trading volume. Coinbase, Crypto.com, Bitstamp, and Kraken added PYUSD to their platforms shortly after its launch.
A couple of months later, PayPal announced its plans to integrate the PYUSD stablecoin into the Venmo mobile payment service. This feature offering users the opportunity to purchase PYUSD and send it to friends and family. PayPal’s ambitions in the cryptocurrency space extend beyond the United States, as the company has also been advancing its crypto initiatives in other countries. Just recently, PayPal was granted its license from the United Kingdom’s Financial Conduct Authority to offer cryptocurrency services in the country.