PayPal (PYPL) disclosed on Wednesday that it has received a subpoena from the U.S. Securities and Exchange Commission (SEC) concerning its USD stablecoin, PayPal USD (PYUSD). The regulatory body has requested pertinent documentation regarding the digital currency.
In a brief statement, PayPal stated, “On November 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request.” The global payments giant refrained from divulging additional details regarding the nature of the SEC’s inquiry.
PayPal ventured into the stablecoin market with PYUSD in August, becoming the first major financial service firm to offer such a digital currency. This move raised concerns among regulators, echoing the Libra stablecoin project by Facebook, now known as Meta Platforms (META), which faced numerous regulatory hurdles.
PayPal’s involvement in the cryptocurrency space has drawn the attention of U.S. authorities, adding the company to the growing list of tech firms under scrutiny for their interaction with digital currencies. Unlike many others facing scrutiny, PayPal stands out as the first major U.S. financial institution to introduce stablecoins for payment and transfer purposes.
PayPal Gets FCA approval for crypto business in the UK
In a contrasting regulatory development across the Atlantic, the Financial Conduct Authority (FCA), responsible for overseeing financial operations in the UK, confirmed PayPal’s official registration to offer specific crypto asset services in the country, effective October 31, 2023. However, the FCA has imposed several constraints on PayPal’s crypto-related activities, aimed at ensuring consumer protection and preventing illicit activities in the burgeoning cryptocurrency market.
According to the official FCA register, PayPal is limited in expanding its current suite of crypto asset offerings. The constraints outlined encompass various aspects such as crypto exchange services, participation in initial coin offerings (ICOs), staking, peer-to-peer exchanges, and decentralized finance activities like lending and borrowing. These restrictions reflect the FCA’s cautious approach towards regulating crypto activities within its jurisdiction.
The FCA’s registration grants PayPal the authority to approve its own crypto-related communications under the newly implemented marketing regime. This development signifies a significant milestone for PayPal, especially considering its temporary suspension of crypto purchases in the UK earlier this year to comply with regulatory requirements.
