Paxos denies rumors of bank charter rejection

Paxos, a brokerage and stablecoin issuer, has denied rumors of its national bank charter being rejected by the Office of the Comptroller of the Currency (OCC).

The rumors arose after it was revealed that the OCC’s preliminary approval, granted in April 2021, was 22 months old and four months overdue.

Paxos tweeted on February 8 that the OCC has not rejected its charter application, nor has the regulator asked it to withdraw it. The company stated that it continues to work constructively with the OCC.

If Paxos obtains the charter, it will operate as a federally-regulated digital asset bank and will be able to operate across the US without obtaining individual state licenses.

In addition to the rumors of its charter rejection, separate reports emerged on Feb. 9 suggesting that Paxos is facing an investigation from the New York Department of Financial Services (NYDFS).

However, the reason for the supposed investigation and the confirmation from either party is not yet publicly known.

Paxos is responsible for the stablecoins Binance USD (BUSD) and Pax Dollar (USDP), as well as operating a crypto brokerage and powering PayPal’s crypto trading capabilities.

The outcome of the rumored OCC and NYDFS investigations will likely have a significant impact on the future of Paxos and its operations.