The SEC is coming for stablecoins (boring topic → big consequences)
Some things, on their own, aren't worth panicking over.
But if they catch on, the resulting domino effect can become a real problem.
Kind of like introducing your little cousin to fart jokes...
You make one, in the hopes of getting a quick laugh - only to trigger a repetitive cycle that drives their parents to "the edge of insanity."
(Sorry, Lauren - didn't know it was going to catch on like that).
The SEC's lawsuit against Paxos (issuer of Binance's 'BUSD' stablecoin), is kind of like that.
The long and short of it is, the SEC has told Paxos that it plans to sue them for violation of investor protection laws in relation to BUSD.
Paxos now has 30 days to respond, and argue why the charges shouldn't be brought against them.
On its own, it's not the end of the world - if BUSD were to disappear, there're plenty of other stablecoins to choose from.
But if (IF!):
What Paxos is doing, is also common practice across other stablecoin projects.
The rulings find Paxos guilty of violating investor protection laws.
It could set a legal precedent that could then be used to take down other stablecoins operating in the U.S.
Which is a big problem, because stablecoins essentially act as a 'safe zone' for crypto investors looking to protect themselves from market volatility.
Not great.
Let's hope Paxos has some good lawyers!
