- PayPal's stablecoin had been under scrutiny.
- The Trump administration has been busy undoing the work of Gary Gensler’s SEC.
- PayPal joins lengthening list of dropped crypto cases.
PayPal just joined a not-so-exclusive club — it is the latest cryptocurrency issuer to escape scrutiny by the US Securities and Exchange Commission.
This week, the payments processing giant said the SEC was closing an inquiry into its two-year-old stablecoin without any enforcement action.
The decision is just the latest in a string of dropped or postponed cases and reviews mounted by the SEC during the tenure of former Chair Gary Gensler.
Dropped cases
In the first 100 days of President Donald Trump’s term, the agency has set aside cases into Coinbase, Gemini, Uniswap, OpenSea, Consensys, and other crypto firms.
“This is it — the moment we’ve been waiting for. The SEC will drop its appeal — a resounding victory for Ripple, for crypto, every way you look at it,” Ripple CEO Brad Garlinghouse said in a post on X on March 19.
The Coinbase case became a lightning rod as CEO Brian Armstrong lambasted Gensler’s approach as “regulation by enforcement” and joined other industry leaders in calling for new laws to establish the industry’s rules rather than existing securities rules.
The SEC, which alleged that Coinbase was operating an unregistered securities exchange and failing to lawfully register its staking service, posed a serious challenge to the industry.
Stablecoins flexing
Had the agency prevailed in the lawsuit, Coinbase as well as other platforms may have been required to only deal in registered securities.
That’s all moot now as the cases evaporate.
As for PayPal, it was an early mover on developing a stablecoin to aid with payments. With two pieces of landmark legislation advancing through Congress for stablecoins, the crypto sector is poised for substantial growth, experts say.
As it happens, David Sacks, Trump’s AI and crypto policy czar, was one of the first executives at PayPal. Yet the SEC’s decision to withdraw from crypto cases is consistent with the administration’s approach of letting crypto be crypto.
In April, the Department of Justice said it, too, would stop pursuing many crypto criminal cases.
The retreat comes even as Trump and his family develop a number of crypto ventures, including memecoins, a purported DeFi platform, as well as a new token eyed by the president’s media company.
Andrew Flanagan is a markets correspondent for DL News. Have a tip? Reach out to aflanagan@dlnews.com.
