- Paxos Securities Settlement Company is the first blockchain-native firm registered by the SEC as a clearing agency.
- The registration enables blockchain-based post-trade infrastructure for faster, cheaper, and more efficient settlement.
- The approval follows a 2019 pilot program and marks a major milestone at the intersection of digital assets and traditional markets.
- Paxos recently settled a $48.5 million case with NYDFS and had an SEC investigation terminated.
On Thursday, Paxos announced its subsidiary has become the first blockchain-native firm the SEC approved as a registered clearing agency. This critical approval allows Paxos Securities Settlement Company to provide official clearing and settlement services, merging traditional finance with blockchain infrastructure.
Clearing agencies verify trades and ensure the correct exchange of money and securities. Consequently, this SEC registration removes major barriers for banks and brokerages to adopt crypto-based systems.
However, this milestone follows a multi-year regulatory journey. The SEC issued a no-action letter in October 2019, allowing Paxos to pilot a blockchain-based settlement service for US equities.
The pilot, which launched in February 2020, demonstrated that blockchain could deliver same-day settlement, reduce costs, and improve operational efficiency. “Our clearing agency registration is the result of seven years of work with the SEC,” said Paxos co-founder and CEO Charles Cascarilla.
Meanwhile, Paxos has navigated other regulatory challenges. The company received a Wells Notice from the SEC in 2023 over its issuance of Binance USD (BUSD), which the agency considered an unregistered security.
Around the same time, the New York Department of Financial Services (NYDFS) ordered Paxos to stop minting new BUSD. The SEC closed its investigation in 2024 and issued a formal termination notice.
Subsequently, Paxos reached a $48.5 million settlement with NYDFS in August 2025 over Binance and BUSD compliance issues. The company also issues stablecoins like Paypal USD (PYUSD), Global Dollar (USDG), and Pax Gold (PAXG).
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