PayPal Receives SEC Subpoena Concerning PYUSD Stablecoin

PayPal has confirmed receipt of a subpoena from the U.S. Securities and Exchange Commission (SEC) related to its U.S. dollar-pegged stablecoin.

The payment behemoth disclosed in its recent 10-Q filing that it was served with an investigative subpoena by the SEC regarding its PYUSD stablecoin.

The specifics of the SEC’s inquiry are not publicly known, but PayPal has indicated that the subpoena “requests the production of documents.” The company has stated its cooperation with the SEC in providing the requested information.

Speaking to Reuters, a spokesperson for PayPal acknowledged the subpoena but declined to provide further details.

The stablecoin in question, PYUSD, was launched by PayPal on August 7, 2023, as a result of a partnership with cryptocurrency infrastructure provider Paxos. To maintain PYUSD’s peg to the U.S. dollar, it is backed by a mixture of U.S. dollar deposits, short-duration U.S. Treasury bills, and other cash-equivalent assets.

Subsequently, on September 11, PayPal introduced a feature that allowed users to transfer cryptocurrency holdings into U.S. dollars.

PYUSD operates as an ERC-20 token on the Ethereum blockchain, crafted to be compatible with various crypto wallets and web3 interfaces. Paxos Trust Company is the entity behind the issuance of this stablecoin.