Paxos Securities Settlement Company has become the first blockchain-native firm to receive registration as a clearing agency from the US Securities and Exchange Commission, marking a regulatory milestone for crypto infrastructure after seven years of agency oversight.

The approval enables Paxos to provide clearing and settlement services as a central securities depository for blockchain-based trades. Charles Cascarilla, Paxos co-founder and CEO, said the 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.”

From Pilot to Registered Clearinghouse

Paxos launched its blockchain settlement pilot in February 2020, following an SEC no-action letter issued in October 2019. 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.

Clearing agencies ensure securities trades are executed cleanly by verifying trades, matching buyers and sellers, and ensuring the exchange of money and securities. A registered, SEC-approved blockchain clearinghouse removes barriers for banks and brokerages to build crypto-based infrastructure.

Regulatory Path and Enforcement Backdrop

Paxos’ path to clearing agency status occurred alongside regulatory scrutiny of its stablecoin operations. In 2023, the SEC issued a Wells Notice to Paxos regarding Binance USD (BUSD), an asset the agency considered an unregistered security. The New York Department of Financial Services (NYDFS) ordered Paxos to stop minting new BUSD around the same time.

In August 2025, Paxos reached a $48.5 million settlement with NYDFS. The SEC closed its investigation in 2024 and issued a formal termination notice.

Active Stablecoin Operations

Paxos continues to issue stablecoins including PayPal USD (PYUSD) and Global Dollar (USDG). The company also issues Pax Gold (PAXG), a digital asset backed by physical gold.

The clearing agency registration does not specify regulatory conditions or requirements attached to the approval, though the designation enables Paxos to operate settlement infrastructure for blockchain-based securities trades under SEC supervision.