SEC Ends PayPal Stablecoin Probe, Clearing Path for PYUSD

The U.S. Securities and Exchange Commission has closed its investigation into PayPal’s dollar-backed stablecoin, PYUSD, without taking enforcement action. The decision, revealed in PayPal’s Q1 2025 financial filings, removes a significant regulatory hurdle for the payments giant and issuer Paxos.

Industry speculation had mounted since November 2023 when the SEC issued a broad subpoena examining whether PYUSD could be classified as an unregistered security. The probe’s closure signals a potentially more measured regulatory approach to certain stablecoin frameworks following Gary Gensler’s departure from the SEC.

While the subpoena requested extensive documentation regarding PYUSD’s operations, regulators ultimately found no grounds for allegations. The resolution comes as stablecoins continue gaining traction in both crypto and traditional finance circles.