New York-based exchange and stablecoin issuer, Paxos has completed the so-called Service Organization Control (SOC) 2 Type II examination, performed by an independent audit firm.
The certification covers Paxos’ custody, exchange and stablecoin product platforms, including its issued tokens PAX, PAX Gold, the itBit by Paxos exchange.
“This designation underscores our dedication to building the best financial market infrastructure that the world’s most sophisticated brands and enterprises trust. Over months of rigorous examination, we demonstrated that our security, data controls, privacy capabilities and technology uphold industry-leading design and operational standards,” the blockchain startup said.
The audit firm inspected Paxos’ processes over six months. The extensive audit involves periodic inspections to ensure Paxos’ complies with certain requirements, including cyber-security controls.
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Receiving the SOC certification, which is monitored annually, allows Paxos to deliver technology and services that meet stringent security and data protection laws globally. Additionally, it assures users that their data is compliant with their company policies, controls and regulatory requirements.
Paxos’ tokens are already green-listed by the New York State Department of Financial Services (NYDFS). These tokens are pre-approved for its virtual currency licensees to custody and listed for trading. All three Paxos issued tokens, the dollar-backed stablecoins (PAX), BUSD (white-labelled for Binance), and gold-backed token, (PAXG) are on the list.
Paxos, which is seeking a national bank trust charter, received no-action relief for its blockchain-based settlement platform from the US Securities and Exchange Commission. A no-action letter means the regulators will not take enforcement actions against Paxos for its product, allowing the company to delve into the use of blockchain technology with broader applications outside the context of crypto space.
The move was a landmark interaction between the mainstream finance and the blockchain space, as the SEC for the first time greenlights settling US equities outside the legacy infrastructure.