PayPal faces SEC action related to PYUSD stablecoin: Official
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 officially disclosed on Nov. 2 in its Q3 financial report with the SEC.
Received by PayPal on Nov. 1, the subpoena requested PayPal to produce certain documents, the firm said. “We are cooperating with the SEC regarding this request,” PayPal noted.
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 the two months since its launch. At the time of writing, the market cap of PYUSD is valued at about $159 million, with almost $2.7 million in daily trading volume, according to data from CoinGecko.
PayPal 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 the 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 also been 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.
Related: Gary Gensler teases details of SEC’s $5B take from enforcement actions, shades crypto
The latest SEC action against PayPal is more evidence that the U.S. is a difficult environment for crypto companies. The regulator has sued several of the largest local companies in the crypto industry, including its ongoing lawsuit against Coinbase exchange. In October 2023, the SEC finally moved to dismiss its three-year lawsuit against Ripple, the company behind the XRP (XRP) token, one of the largest cryptocurrencies by market cap.
In April 2023, Circle CEO Jeremy Allaire argued that a cryptocurrency crackdown by U.S. regulators had been a significant factor behind the declining market capitalization of Circle’s USD Coin (USDC) stablecoin.
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A Nigerian court has reportedly delayed the country’s tax evasion case against Binance until April 30 to give time for Nigeria’s tax authority to respond to a request from the crypto exchange.
Reuters reported on April 7 that a lawyer for Binance, Chukwuka Ikwuazom, asked a court the same day to invalidate an order allowing for court documents to be served to the company via email.
Binance doesn’t have an office in Nigeria and Ikwuazom claimed the Federal Inland Revenue Service (FIRS) didn’t get court permission to serve court documents to Binance outside the country.
“On the whole the order for the substituted service as granted by the court on February 11, 2025 on Binance who is … registered under the laws of Cayman Islands and resident in Cayman Islands is improper and should be set aside,” he said.
FIRS sued Binance in February, claiming the exchange owed $2 billion in back taxes and should be made to pay $79.5 billion for damages to the local economy as its its operations allegedly destabilized the country’s currency, the naira, which Binance denies.
It also reportedly alleged that Binance is liable to pay corporate income tax in Nigeria, as it has a “significant economic presence” there, with FIRS requesting a court order for the exchange to pay income taxes for 2022 and 2023, plus a 10% annual penalty on unpaid amounts along with a nearly a 27% interest rate on the unpaid taxes.
Nigeria’s legal history with Binance
In February 2024, Nigeria arrested and detained Binance executives Tigran Gambaryan and Nadeem Anjarwalla on tax fraud and money laundering charges. The country dropped the tax charges against both in June and the remaining charge against Gambaryan in October.
Tigran Gambaryan (right) was seen in a September video struggling to walk into a courtroom in the Nigerian capital of Abuja. Source: X
Anjarwalla managed to slip his guards and escape Nigerian custody to Kenya in March last year and is apparently still at large.
Related: Binance exec shares details about release from Nigerian detention
Gambaryan, a US citizen, returned home in October after reports suggested his health had deteriorated during his detainment with reported cases of pneumonia, malaria and a herniated spinal disc that may need surgery.
Binance stopped its naira currency deposits and withdrawals in March 2024, effectively leaving the Nigerian market.
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Asset manager Teucrium Investment Advisors is set to launch the first XRP-based exchange-traded fund in the US markets, a leveraged XRP (ETF) on the NYSE Arca.
The Teucrium 2x Long Daily XRP ETF will seek to offer investors two times the daily return of the XRP (XRP) token with a 1.85% management fee and annual expense ratio, according to the company’s website. The XRP-based ETF will trade under the XXRP ticker beginning April 8.
“If you have a short-term high-conviction view on XRP prices, you may consider exploring the Teucrium 2x Long Daily XRP ETF,” the alternative asset manager said.
XXRP currently has $2 million worth of net assets.
Details of Teucrium’s soon-to-be-launched XXRP ETF. Source: Teucrium
Teucrium founder and CEO Sal Gilbertie told Bloomberg on April 7 that investors had shown strong interest in an XRP ETF and hinted that it may file to list more crypto ETFs in the future.
Gilbertie was also pleased that XXRP would launch during a market downturn driven largely by US President Donald Trump’s tariffs.
“What better time to launch a product than when prices are low?” Gilbertie told Bloomberg.
Likelihood of an approved spot XRP ETF still high: Analyst
Bloomberg ETF analyst Eric Balchunas said it was “very odd” to see a new asset’s first ETF come in leveraged form — however, he added that the odds of a spot XRP ETF being approved remain “pretty high.”
Source: Eric Balchunas
Several spot XRP ETF applications from the likes of Grayscale, Bitwise, Franklin Templeton, Canary Capital and 21Shares are being reviewed by the Securities and Exchange Commission.
In February, Balchunas and fellow Bloomberg ETF analyst James Seyffart attributed 65% approval odds to a spot XRP ETF in 2025.
Predictions market Polymarket states there is currently a 75% chance that the SEC will approve a spot XRP ETF in 2025.
Related: XRP price sell-off set to accelerate in April as inverse cup and handle hints at 25% decline
Up until recently, ETF issuers would have seen a different environment for filing for XRP ETFs as Ripple Labs — the creators of the XRP token — and the SEC battled out a four-year court battle over XRP’s security status.
That case came to a close last month.
Teucrium has amassed over $310 million worth of assets under management since it was founded in 2010.
It offers mostly agricultural commodities, such as ETFs tracking the likes of corn, soybeans, sugar and wheat.
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