Paxos Secures Landmark SEC Approval as First Blockchain-Native Clearing Agency
By Abdus Salam
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Paxos has made history by becoming the first blockchain-native firm to receive approval from the U.S. Securities and Exchange Commission (SEC) as a registered clearing agency. This landmark decision positions Paxos at the forefront of integrating blockchain technology into the fabric of traditional securities trading, highlighting an increasing interest from Wall Street in innovative financial solutions.
In a statement released Thursday, Paxos announced that its subsidiary, Paxos Securities Settlement Company, is now the only SEC-approved blockchain-native entity authorized to offer clearing and settlement services as a central securities depository in the United States. The firm emphasized that this approval marks a vital advancement in the evolution of financial market infrastructure, bridging the gap between blockchain innovations and traditional capital markets.
The role of clearing agencies is pivotal; they ensure that securities transactions are executed accurately, acting as intermediaries that verify trades, match buyers with sellers, and facilitate the proper exchange of funds and securities. By becoming a registered blockchain clearinghouse, Paxos is poised to eliminate barriers for banks and brokerages seeking to establish crypto-based operational frameworks.
This achievement follows a series of strategic developments for Paxos. In October 2019, the SEC issued a no-action letter, enabling Paxos to pilot a blockchain settlement service for U.S. equities, which officially launched in February 2020. The pilot effectively demonstrated that blockchain can lead to same-day settlements, reduced costs, and enhanced operational efficiencies without compromising regulatory oversight.
“Our clearing agency registration is the culmination of seven years of collaboration with the SEC, starting with our No-Action Letter in 2019 and advancing through our settlement pilot that involved some of the world’s leading financial institutions,” remarked Charles Cascarilla, co-founder and CEO of Paxos.
In addition to its groundbreaking clearing agency status, Paxos is recognized as an issuer of various stablecoins and digital assets, including PayPal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG). However, the firm has encountered challenges with regulatory bodies, notably under former SEC Chair Gary Gensler, when it received a Wells Notice in 2023 regarding its issuance of the Binance USD (BUSD) stablecoin, which the SEC classified as an unregistered security. Following the closure of an investigation in 2024, the SEC chose not to pursue enforcement action against Paxos.
Moreover, the company resolved compliance issues regarding BUSD with a $48.5 million settlement reached with the New York Department of Financial Services (NYDFS) in August 2025. This latest SEC approval solidifies Paxos' stature as a pivotal player in shaping the future of financial technology and regulatory compliance.
As the financial landscape continues to evolve, Paxos' groundbreaking approval could serve as a catalyst for further adoption of blockchain technologies across various financial services, signaling a promising future in securities trading.
Source: Cointelegraph