SEC Approves Paxos as a Blockchain-Native Clearing Agency

Paxos said its approval as a blockchain-focused clearing agency represents a “critical piece of financial market infrastructure” as growing interest in crypto continues to be shown by Wall Street.

Paxos, a blockchain infrastructure platform and stablecoin issuer, said it has become the first “blockchain-native” firm to be granted registration as a clearing agency by the US Securities and Exchange Commission.

Paxos said on Thursday that its subsidiary, Paxos Securities Settlement Company, has become “the only blockchain-native firm” to receive SEC approval for providing 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 help ensure securities trades are completed properly. Stock buyers and sellers do not trade directly, so clearing and settlement providers are used to verify transactions, match both parties, and ensure the exchange of funds and securities is carried out correctly.

A registered, SEC-approved blockchain clearinghouse removes barriers that have limited banks and brokerages from building crypto-based infrastructure.

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

Paxos said the pilot showed that blockchain-based post-trade infrastructure could enable same-day settlement, lower 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.

Paxos is the issuer of several stablecoins and digital assets, including PayPal USD, Global Dollar and Pax Gold.

The company had a rocky history with the SEC under former chair Gary Gensler after a Wells Notice was received in 2023, with an enforcement action planned by the agency over the issuance of Binance USD, a stablecoin tied to Binance that was considered by the SEC to be an unregistered security.

Around the same period, New York Department of Financial Services ordered Paxos to stop minting new Binance USD.

The investigation was closed by the SEC in 2024, and a formal termination notice was issued stating that enforcement action would not be pursued. Paxos also reached a $48.5 million settlement with New York Department of Financial Services in August 2025 over compliance issues tied to Binance and Binance USD.