Stablecoin issuer Paxos has laid off 65 people, amounting to about 20% of its workforce.
These cuts come at a time when the company is working to launch and scale new regulated tokens, Bloomberg reported Wednesday (June 12), citing an email sent to Paxos employees by CEO Charles Cascarilla.
Reached by PYMNTS, a Paxos spokesperson confirmed the report.
In the email obtained by Bloomberg, Cascarilla wrote that the company is “in a very strong financial position to succeed” and that the reduction in headcount “allows us to best execute on the massive opportunity ahead in tokenization and stablecoin.”
A major source of Paxos’ revenues was eliminated last year when a stablecoin that was issued by Paxos and branded and promoted by cryptocurrency exchange Binance was phased out amid pressure from U.S. regulators, according to the report.
Currently, Paxos issues a stablecoin branded by PayPal, among other coins, and one of its affiliates offers the Lift Dollar (USDL) that is issued in the United Arab Emirates (UAE), the report said.
An unnamed source told Bloomberg that Paxos plans to phase out its settlement services in commodities and securities, focusing instead on stablecoins and on the tokenization of assets, per the report.
Paxos stopped issuing the Binance-branded BUSD stablecoins and ended its relationship with the crypto exchange in February 2023 after the New York Department of Financial Services (NYDFS) launched an investigation into its issuance of the coins.
Binance and Paxos partnered to launch the BUSD stablecoin product in 2019, and the stablecoin was approved then by the NYDFS.
However, the Securities and Exchange Commission (SEC) alleged that the BUSD stablecoin is an unregistered security and sent a Wells Notice to Paxos informing it that the agency planned to bring enforcement actions against it for violating federal investor protection laws.
The PayPal-branded stablecoin issued by Paxos was introduced in August 2023, with PayPal saying at the time in a press release that PayPal USD is “designed to contribute to the opportunity stablecoins offer for payments and is 100% backed by U.S. dollar deposits, short-term U.S. Treasuries and similar cash equivalents.”
