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SEC drops investigation into PayPal’s stablecoin

PayPal says the US Securities and Exchange Commission has abandoned its investigation into the payment giant’s US-dollar stablecoin.

PayPal said in an April 29 regulatory filing that the SEC concluded its investigation into PayPal USD (PYUSD) and wouldn’t be taking any action.

The company said it received a subpoena from the SEC’s Division of Enforcement over its stablecoin in November 2023. 

“The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request,” PayPal stated at the time.

In its latest filing, the firm said the SEC notified it in February that the agency “was closing this inquiry without enforcement action.”

PayPal has said its stablecoin is 100% redeemable for US dollars and “fully backed” by dollar deposits, including short-term treasuries and cash equivalents. 

However, the stablecoin has struggled to gain momentum in a crowded market dominated by rivals Tether and Circle. PYUSD has a market capitalization of just $880 million, less than 1% of Tether’s (USDT) $148.5 billion.

PayPal’s stablecoin has seen better growth this year with a 75% increase in PYUSD circulating supply since the beginning of 2025, according to CoinGecko. It remains down 14% from its peak supply of just over $1 billion in August 2024. 

SEC drops investigation into PayPal’s stablecoin
PayPal USD market capitalization. Source: CoinGecko

Earnings on PYUSD, Coinbase partnership

That growth could be bolstered by a company announcement on April 23 introducing rewards for PYUSD in a new loyalty offering that will enable US users to earn 3.7% annually for holding the asset on the platform. 

Meanwhile, on April 24, PayPal announced a partnership with Coinbase to increase the adoption of PYUSD. 

“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center,”  said Alex Chriss, PayPal President and CEO.

Related: PayPal to offer 3.7% yield on stablecoin balances: Report

The payments giant also reported robust first-quarter earnings and the completion of significant share repurchase activities. 

The firm beat Wall Street estimates, earning $1.33 per share in the first quarter, topping analyst expectations of $1.16. Revenue rose 1% from a year before to $7.8 billion. 

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The three key questions about the China spy case that need to be answered

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The three key questions about the China spy case that need to be answered

The government has published witness statements submitted by a senior official connected to the collapse of a trial involving two men accused of spying for China.

Here are three big questions that flow from them:

1. Why weren’t these statements enough for the Crown Prosecution Service (CPS) to carry on with the trial?

For this prosecution to go ahead, the CPS needed evidence that China was a “threat to national security”.

The deputy national security adviser Matthew Collins doesn’t explicitly use this form of words in his evidence. But he comes pretty close.

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In the February 2025 witness statement, he calls China “the biggest state-based threat to the UK’s economic security”.

More on China

Six months later, he says China’s espionage operations “harm the interests and security of the UK”.

Yes, he does quote the language of the Tory government at the time of the alleged offences, naming China as an “epoch-defining and systemic challenge”.

But he also provides examples of malicious cyber activity and the targeting of individuals in government during the two-year period that the alleged Chinese spies are said to have been operating.

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Witness statements published in China spy trial

In short, you can see why some MPs and ex-security chiefs are wondering why this wasn’t enough.

Former MI6 head Sir Richard Dearlove told Sky News this morning that “it seems to be there was enough” and added that the CPS could have called other witnesses – such as sitting intelligence directors – to back up the claim that China was a threat.

Expect the current director of public prosecutions (DPP) Stephen Parkinson to be called before MPs to answer all these questions.

2. Why didn’t the government give the CPS the extra evidence it needed?

The DPP, Stephen Parkinson, spoke to senior MPs yesterday and apparently told them he had 95% of the evidence he needed to bring the case.

The government has said it’s for the DPP to explain what that extra 5% was.

He’s already said the missing link was that he needed evidence to show China was a “threat to national security”, and the government did not give him that.

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What does China spy row involve?

The newly published witness statements show they came close.

But if what was needed was that explicit form of words, why was the government reticent to jump through that hoop?

The defence from ministers is that the previous Conservative administration defined China as a “challenge”, rather than a “threat” (despite the numerous examples from the time of China being a threat).

The attack from the Tories is that Labour is seeking closer economic ties with China and so didn’t want to brand them an explicit threat.

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Is China an enemy to the UK?

3. Why do these statements contain current Labour policy?

Sir Keir Starmer says the key reason for the collapse of this trial is the position held by the previous Tory government on China.

But the witness statements from Matthew Collins do contain explicit references to current Labour policy. The most eye-catching is the final paragraph of the third witness statement provided by the Deputy National Security Adviser, where he quotes directly from Labour’s 2024 manifesto.

He writes: “It is important for me to emphasise… the government’s position is that we will co-operate where we can; compete where we need to; and challenge where we must, including on issues of national security.”

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In full: Starmer and Badenoch clash over China spy trial

Did these warmer words towards China influence the DPP’s decision to drop the case?

Why did Matthew Collins feel it so important to include this statement?

Was he simply covering his back by inserting the current government’s approach, or was he instructed to put this section in?

A complicated relationship

Everyone agrees that the UK-China relationship is a complicated one.

There is ample evidence to suggest that China poses a threat to the UK’s national security. But that doesn’t mean the government here shouldn’t try and work with the country economically and on issues like climate change.

It appears the multi-faceted nature of these links struggled to fit the legal specificity required to bring a successful prosecution.

But there are still plenty of questions about why the government and the CPS weren’t able or willing to do more to square these circles.

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Trump’s second term fuels a $1B crypto fortune for his family: Report

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Trump’s second term fuels a B crypto fortune for his family: Report

Trump’s second term fuels a B crypto fortune for his family: Report

The Trump family’s crypto ventures have generated over $1 billion in profit, led by World Liberty Financial and memecoins including TRUMP and MELANIA.

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SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’

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SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’

SEC chair: US is 10 years behind on crypto, fixing this is ‘job one’

SEC Chair Paul Atkins said the US is a decade behind on crypto and that building a regulatory framework to attract innovation is “job one” for the agency.

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