Paxos is the company that holds deposits for and issues $BUSD. They've been given notice that the SEC intends to sue them.
Over what is not exactly clear yet.
Typically the SEC goes after securities. Part of the usual definition of securities is the expectation of gain. Paxos makes no claims about gains. You give them 1 USD, the give you 1 BUSD. You give them 1 BUSD, they give you 1 USD. So that would seem to not be a security on the face of it.
There has been some speculation that the issue is that Paxos does invest those USD deposits to obtain some investment return on its own behalf and that is the issue.
Another speculation is that Paxos deposits "resemble" bank deposits and that is the issue. Bank deposit issues typically wouldn't come under the SEC though.
For now, Paxos has halted minting new $BUSD.
$BUSD is under some sell pressure.
