The Securities and Exchange Commission has registered Paxos Securities Settlement Company as a clearing agency — the first blockchain-native firm to hold that designation. CEO Charles Cascarilla confirmed the registration on May 28, 2026, describing it as “seven years of work with the SEC.” That timeline is accurate: Paxos filed for a No-Action letter in 2019, received it in October of that year, and launched its blockchain settlement pilot in February 2020. Full registration arrived six years later, under a different SEC chair, after the firm survived a Wells Notice and a separate $48.5 million state settlement along the way.
**What clearing agency registration actually covers**
Clearing agencies sit at the operational center of US securities markets. They confirm trades, manage counterparty exposure between the trade date and settlement, and handle the final transfer of securities and cash. DTCC processes more than $2 quadrillion in securities transactions annually under the same designation. Paxos is now in that regulatory category.
The practical difference in Paxos’s approach is settlement timing. Traditional clearing runs on T+1 cycles: a trade today settles tomorrow, with a full day of counterparty exposure in between. Paxos uses atomic delivery-versus-payment, where the securities leg and the cash leg transfer simultaneously or neither transfers. There is no exposure window because the settlement gap doesn’t exist.
For a compliance officer evaluating counterparty risk in post-trade workflows, that distinction has direct operational implications.
**The regulatory path that preceded it**
In February 2023, under then-Chair Gary Gensler, the SEC issued Paxos a Wells Notice targeting BUSD, the stablecoin Paxos issued in partnership with Binance. Paxos halted new BUSD issuance within days. The Wells Notice closed in 2024 with no enforcement action.
In August 2025, Paxos reached a $48.5 million settlement with the New York Department of Financial Services over BUSD-related AML control failures. That settlement is separate from the SEC matter but sits in the same public record. The clearing agency registration covers Paxos’s securities settlement subsidiary specifically; it does not extend to PYUSD, USDG, or PAXG, the gold-backed token.
**What this means for other blockchain firms**
Before 2019, no framework existed for a blockchain-native firm to qualify as a clearing agency in the US. Now one does, road-tested across two administrations. Paxos took seven years to walk that path — which is slow by any standard — but the path now exists and other firms building post-trade infrastructure on distributed ledger technology have a regulatory precedent to reference.
The Paxos registration coincides with a broader institutional push into tokenized securities: NYSE parent ICE investing in OKX, the BIS Project Agorá prototype for tokenized cross-border settlement, DTCC’s own distributed ledger pilots. These are separate initiatives, but they share the same destination — regulated securities infrastructure running on programmable settlement. The SEC’s registration of Paxos is the first formal acknowledgment, at the clearing layer, that blockchain-native infrastructure can meet that bar.
**Sources**
– CoinTelegraph: “Paxos is first blockchain company to be approved as SEC clearing agency” — May 28, 2026 (Brayden Lindrea)
– Paxos CEO Charles Cascarilla statement, confirmed via CoinTelegraph reporting
– NYDFS: Paxos $48.5M settlement, August 2025
