PayPal Receives SEC Subpoena Over PYUSD Stablecoin

Stablecoin issuer and payments firm, PayPal Holdings Inc (NASDAQ: PYPL) said Thursday that it has received a subpoena from SEC’s Enforcement division regarding its PYUSD, USD-pegged stablecoin, as indicated in its Q3 earnings filing.

The stablecoin was issued in August 2023 making the company the first major tech firm to support digital currencies for payments and transfers.

“On November 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request,” the SEC filing indicates.

PayPal also indicated in its Q3 filing that it has “received Civil Investigative Demands (CIDs) from the Consumer Financial Protection Bureau (CFPB) related to Venmo’s unauthorized funds transfers and collections processes, and related matters, including treatment of consumers who request payments but accidentally designate an unintended recipient. We are cooperating with the CFPB in connection with these CIDs.”

Major exchanges like Coinbase, Crypto.com, Bitstamp, and Kraken have listed PYUSD on their platforms, and in September 2023 it integrated PYUSD into Venmo mobile payment service. PayPal also received a license from the U.K. Financial Conduct Authority for offering crypto services in the country.

PYUSD is currently trading at a market cap of $158.7 million.

PayPal Holdings Inc has become the latest cryptocurrency-related entity to come under scrutiny from the SEC, following the regulatory body’s ongoing legal battle with Coinbase. In a notable shift in October 2023, the SEC concluded its three-year legal action against Ripple. This move underscores the SEC’s stringent regulatory stance on the cryptocurrency sector, amidst a trend of conventional businesses increasingly adopting digital currencies.

SEC Chair Gary Gensler said that stablecoins may be securities and therefore subject to the regulator’s strict investor protection and disclosure rules, as reported by Bloomberg. 

In a reshuffle of top leadership management, PayPal named Jamie Miller as EVP & CFO, effective Nov. 6, 2023. She will be succeeding Gabrielle Rabinovitch, who is currently acting CFO. PayPal CEO Alex Chriss notified employees in an email that Sri Shivananda, EVP & CTO will be leaving the company by the end of the year after serving for more than eight years, Moneycontrol reported. EVP & CIO Archie Deskus will be filling in for the CTO role.

Produced in association with Benzinga