By George Ward
As the New York Department of Financial Services (NYDFS) announced that it is probing Paxos, the firm’s USDP stablecoin lost its $1 peg briefly. The asset hovered at $0.98 after its brief de-pegging.
Another Dollar Depeg
The USDP stablecoin was launched in 2018 and is managed by Paxos. Since its establishment, the asset has failed to compete with other stablecoins like BUSD, USDC, and USDT.
Nevertheless, it still attracts traders and makes a name for itself. Following the brief loss of its dollar peg, the stablecoin was hovering around $0.999 at the time of writing.
According to reports, the asset lost its peg numerous times last year. Meanwhile, the fluctuation in the price of the USDP coin occurred after the NYDFS revealed that it is investigating the stablecoin issuer, Paxos.
Industry observers believe the NYDFS investigation triggered the sudden price drop for the USDP stablecoins. But Paxos, the coin issuer, has been in the spotlight for various reasons.
Reports also indicate that the Office of the Comptroller of the Currency (OCC) has asked Paxos to pull out its application for approval for a national trust bank charter, but Paxos has denied the request.
In a Twitter post, Paxos cleared the air by stating that it has not been asked to withdraw its application by the OCC and that the agency has not denied the company’s application.
NYDFS Eyes Crypto Market Oversight
The NYDFS has taken several actions recently to bring erring crypto trading platforms to order. The move will also exert its regulatory presence in the digital asset market.
Last June, Superintendent Adrienne A. Harris released a regulatory guidance targeted at crypto assets pegged to the USD. The regulator recently issued another guidance to ensure compliance from crypto custodial companies operating in New York.
The NYDFS’s recent move was fueled by the several bankruptcy cases that have rocked the crypto industry, with investors losing millions of dollars. In a related development, the agency is reported to have slammed a $30 million fine on the crypto trading platform Robinhood for violating some of the state’s rules.
Furthermore, Paxos seeks to increase its market presence by collaborating with different industry players in the crypto space. The firm made headlines after announcing a strategic partnership with MakerDAO to boost its Pax Dollar adoption rate.
Paxos recently got approval to open a branch in Singapore after the Monetary Authority of Singapore (MAS) registered the crypto trading platform. Additionally, Paxos revealed that it plans to hire close to 130 individuals in Singapore to manage its operations.