Paxos Wins SEC Clearing Agency Registration

Blockchain infrastructure platform and stablecoin issuer Paxos says it has become the first “blockchain-native” firm that the US Securities and Exchange Commission has granted registration as a clearing agency.

Paxos said on Thursday that its subsidiary, Paxos Securities Settlement Company, has become “the only blockchain-native firm” that the SEC approved to provide clearing and settlement services as a central securities depository in the US.

The approval represents a “critical piece of financial market infrastructure” as blockchain technology and traditional capital markets continue to converge, the company added. 

Clearing agencies ensure securities trades are executed cleanly. Stock buyers and sellers do not trade directly and need clearing and settlement providers that verify the trade, match the buyer and seller, and then ensure the actual exchange of money and securities happens correctly.

A registered, SEC-approved blockchain clearinghouse removes barriers for banks and brokerages to build crypto-based infrastructure.

In October 2019, the SEC issued a no-action letter allowing Paxos to pilot a blockchain-based settlement service for US equities, and the service launched in February 2020.

Paxos said the pilot demonstrated that blockchain-based post-trade infrastructure could deliver same-day settlement, reduce costs and improve operational efficiency within a fully regulated framework.

“Our clearing agency registration is the result of seven years of work with the SEC, beginning with our No-Action Letter in 2019 and the settlement pilot we operated with some of the world’s largest and most sophisticated financial institutions,” said Paxos co-founder and CEO Charles Cascarilla.

Related: Paxos Labs to use $12M raise toward yield, lending, issuance tools

Paxos is the issuer of several stablecoins and digital assets, including PayPal USD (PYUSD), Global Dollar (USDG) and Pax Gold (PAXG).

The company has had a rocky history with the SEC under its former chair, Gary Gensler, having received a Wells Notice in 2023, with the agency planning to recommend an enforcement action over the issuance of Binance USD (BUSD), a stablecoin tied to the crypto exchange Binance, which the SEC 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, stating it would not pursue enforcement action. Paxos also reached a $48.5 million settlement with NYDFS in August 2025 over Binance and BUSD compliance issues.

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