The last word hasn't been spoken here yet if I understand correctly that Paxos has 30 days to respond and convince the SEC otherwise.
What I find a bit odd is that BUSD gets targeted first. What about Tether and USDC? This may just be the beginning of a wave of lawsuits against stable coin providers. I do get Armstrong's point that attacking regulated stable coin providers will only lead to people using offshore services, thereby increasing overall risk.

I don't know how the SEC will try to bend the law in their favor, but the securities term is already undergoing quite some stretches here and there when it comes to cryptocurrencies.


On this website I found the following under "What is not a security":

- An interest in a deposit account with a bank or a savings and loan association

If I had to decide whether stable coin staking is technically the same as holding a security, I would tend towards saying no because it seems to be more similar to a standard deposit account.

The XRP case is now three years old and there is still no decision how to go about it from the SEC's point of view. It's possible that this will also take years, but the SEC is already pushing for providers to cancel their staking programs and the issuance of new stable coin supply.