Paxos is also the issuer of BUSD (used by Binance). In Feb this year, SEC labelled BUSD an uregistered security so I'm not sure if that means PYUSD can be labelled a security as well or if BUSD is now completely fine or what is going on.
Paxos is also an issuer of PAXG though SEC so far hasn't targeted that particular coin.
RE: PAYPAL steps into stable coin market. The Good, The Bad and The UglyPotential Implications