The US Securities and Exchange Commission’s (SEC) attitude towards Paxos, which issues stablecoins, is creating uneasiness in the crypto market.Experts say that this move by the SEC could have major implications for the $ 137 billion crypto market, emphasising that this move could create significant pressure not only on Paxos but across the entire industry. While these stablecoins are often backed by real assets such as bonds or reserve cash, they allow people to quickly enter and exit different coins without having to convert fiat currency.Paxos had issued a digital currency called BUSDPaxos had issued a stablecoin associated with Binance, one of the world’s largest cryptocurrency exchanges. The Binance coin, known as BUSD, is traded pegged one-to-one with the US dollar and allows transfers between other cryptocurrencies. However, last week, the financial regulator of the state of New York instructed Paxos to stop the issuance of BUSD. Paxos said the SEC issued a notice to him that the regulator was considering recommending an action claiming that BUSD was a security. Paxos also said that the notice suggested that Paxos should register the BUSD offering under federal securities laws. Although the SEC has not yet initiated a formal action following these developments, it is closely monitoring the actions of Paxos. Analysts state that this move could have a major impact for all stablecoins, including tether, if the SEC initiates an official procedure. “If the SEC charges Paxos, other stablecoin issuers should also register or prepare for a court battle with the SEC,” Renato Mariotti, a partner at law firm BCLP, said in a statement. The notice to Paxos also specifically focuses on the question of whether stablecoins are securities.Paxos claims that it categorically disagrees with the SEC staff because BUSD is not a security under federal securities laws.The SEC uses the Howey test to determine whether an asset is considered a security. As part of the Howey test, four criteria are used to determine whether an asset is a security. At the beginning of these criteria is whether the investor has a profit expectation on this asset. Experts emphasise that it is also possible for Paxos to aggressively sue the SEC, and that doing so will be costly. However, if BUSD is accepted as a security by the SEC, the regulator’s oversight of the stablecoin will increase, and Paxos will have to register with the SEC and accept stricter regulations regardless. “The basis for this action will necessarily be specific to the Paxos BUSD structure, but it will likely have far-reaching implications for other stablecoin issuers selling coins to the US,” CoinShares Product Manager Townsend Lansing told CNBC. Experts underline that there are a number of different scenarios that could arise in this regard and that the process will vary according to what the SEC claims against Paxos and how the two parties will proceed. Mariotti said in a statement on the subject, “I believe it is likely that the SEC will reach a settlement with Paxos and recognise that Paxos BUSD is a security, leading other stablecoins to do the same and register. ” Mariotti also states that it is possible for Paxos to aggressively file a lawsuit against the SEC, but this means that apart from the cost, it may take many years of litigation. Click here: Binance CEO ‘CZ’ reveals that BUSD’s market capitalisation has declined