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.
As a bit of a lucky bunch, I reckon it's the worst stablecoin for actually being backed by anything of value. USDT recently publicised it's financial statement to the public for last year (I think) I saw it in another thread recently, USDC is managed by coinbase and another firm so it seems the safest of them all. (I've excluded dai as I don't think I fully understand it).
There's also the case that binance said any usdt or usdc deposited there would be converted to busd, I think that also makes it much riskier than usdc and usdt because of that (you're relying on multiple assets).