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Paxos Trust Company

Topic: Company

 From HandWiki - Reading time: 6 min
Short description: Financial technology company
Paxos Trust Company
FormerlyitBit
TypeLimited purpose trust company
IndustryFinancial technology
Founded2012; 12 years ago (2012)
Headquarters
New York, NY[1]
Key people
  • Charles Cascarilla (CEO and co-founder)
  • Rich Teo (CEO of Paxos Asia and co-founder)
  • Andrew Chang (COO)
Websitepaxos.com

Paxos Trust Company is a New York–based financial institution and technology company specializing in blockchain.[2] The company's product offerings include a cryptocurrency brokerage service, asset tokenization services, and settlement services.[3][4][5] ItBit, a bitcoin exchange run by Paxos, was the first bitcoin exchange to be licensed by the New York State Department of Financial Services, granting the company the ability to be the custodian and exchange for customers in the United States.[6][7]

Paxos was founded in 2012[8] and is based in New York City , with offices in London and Singapore.[9] (As of April 2021), the company has received $540 million in funding.[10]

History

Charles Cascarilla and Rich Teo founded Paxos in 2012 as the itBit Bitcoin exchange.[11][12] In 2015, the company changed its legal name from itBit to Paxos Trust Company.[13] At the same time, the New York State Department of Financial Services granted Paxos a limited-purpose trust charter,[6] making it the first company in the U.S. approved and regulated to offer crypto products and services.[14][15]

The company received $65 million in a funding round in May 2018.[8] In September 2018, Paxos launched the Paxos Standard stablecoin as one of the industry’s first regulated stablecoins.[16] Paxos introduced PAX Gold, the first regulated gold-backed digital token, in September 2019.[13]

In October 2019, Paxos received a no-action letter from the U.S. Securities and Exchange Commission (SEC) to test a new settlement service for U.S.-listed equities on a private blockchain.[17][5] The service went live in February 2020.[18] In July 2020, Paxos launched its crypto brokerage with Revolut as the first client.[3][19]

In October 2020, PayPal announced that it would offer cryptocurrency buy, hold and sell services to its users through a partnership with Paxos.[20][21]

In September 2022, Canada -based multi-asset retail financial trading services provider OANDA Global Corporation (OANDA) collaborated with Paxos to develop a crypto trading ecosystem.[22] On 20 October 2022, OANDA launched crypto trading function to its forex trading platform in partnership with Paxos. The partnership will allow the U.S.-based clients of OANDA to trade cryptocurrencies on Paxos’ itBit exchange from the OANDA mobile app.[23]

Products

Crypto brokerage

Paxos provides a crypto brokerage so clients can give their customers access to the cryptocurrency market. The company manages the regulatory and technology components of cryptocurrency trading on behalf of its clients.[3][19]

Pax Dollar

Paxos Standard (PAX) that was renamed Pax Dollar (USDP), launched in September 2018, is one of the industry's first regulated stablecoins, tied to the U.S. dollar such that 1 PAX = 1 USD.[16][24]

PAX Gold

PAX Gold (PAXG) is a digital asset backed by physical gold.[25] Paxos Trust Company is the custodian for PAX Gold tokens and their associated physical gold bars.[26]

itBit

ItBit is a digital asset exchange approved by the New York State Department of Finance to trade five digital assets: bitcoin (BTC), Ethereum (ETH), Bitcoin Cash, Litecoin (LTC), and PAX Gold (PAXG).[15][27][28]

Post-trade services

Paxos provides post-trade automation services for precious metals and other trades. Services include automation of trade confirmations and settlement among multiple parties.[9]

Securities settlement service

In October 2019, the SEC gave Paxos permission to establish a settlement service for stock trading. Credit Suisse and Société Générale were the first banks to sign on to use the service.[17] Paxos announced it had settled a securities trade on a blockchain for the first time in February 2020.[29]

References

  1. ↑ "Who We Supervise". https://myportal.dfs.ny.gov/web/guest-applications/who-we-supervise. 
  2. ↑ "Paxos Trust Company LLC | VCfund.me Data". https://data.vcfund.me/company/paxos-trust-company-llc. 
  3. ↑ 3.0 3.1 3.2 Roberts, Jeff John (15 July 2020). "Revolut bank offers cryptocurrency through Paxos 'plug and play' service". Fortune. https://fortune.com/2020/07/15/revolut-bank-offers-cryptocurrency-through-paxos-plug-and-play-service/. 
  4. ↑ "Paxos Trust Co LLC". Bloomberg. https://www.bloomberg.com/profile/company/1624511D:US?sref=lMCzuOUc. 
  5. ↑ 5.0 5.1 "Paxos Trust Company, LLC; Division of Trading and Markets No-Action Letter: Clearing Agency Registration". https://www.sec.gov/divisions/marketreg/mr-noaction/2019/paxos-trust-company-102819-17a.pdf. 
  6. ↑ 6.0 6.1 Popper, Nathaniel (7 May 2015). "Bitcoin Exchange Receives First License in New York State". The New York Times Dealbook. https://www.nytimes.com/2015/05/08/business/dealbook/bitcoin-exchange-receives-first-license-in-new-york-state.html. 
  7. ↑ Nasr, Reem (7 May 2015). "NY grants first banking license to bitcoin exchange itBit". CNBC. https://www.cnbc.com/2015/05/07/ny-grants-first-banking-license-to-bitcoin-exchange-itbit.html. 
  8. ↑ 8.0 8.1 Irrera, Anna (31 May 2018). "Blockchain and cryptocurrency startup Paxos raises $65 million". Reuters. https://www.reuters.com/article/us-crypto-currencies-paxos/blockchain-and-cryptocurrency-startup-paxos-raises-65-million-idUSKCN1IW1RW. 
  9. ↑ 9.0 9.1 Hansen, Sarah (8 August 2018). "Bitcoin Custodian Paxos Enters Gold Market With Post-Trade Confirmation Product". Forbes. https://www.forbes.com/sites/sarahhansen/2018/08/08/bitcoin-custodian-paxos-enters-gold-market-with-post-trade-confirmation-product/. 
  10. ↑ "Paxos Raises $300 Million in Series D Funding at $2.4 Billion Valuation". Paxos. 29 April 2021. https://www.paxos.com/paxos-raises-300-million-in-series-d-funding-at-2-4-billion-valuation/. 
  11. ↑ "Bitcoin Exchange itBit says it won part of bitcoin auction". Reuters. 10 March 2015. https://www.reuters.com/article/us-bitcoin-auction/bitcoin-exchange-itbit-says-it-won-part-of-bitcoin-auction-idUSKBN0M620Z20150311. 
  12. ↑ Shieber, Jonathan (7 July 2014). "Seeing Opportunities In The US, itBit Relocates To NYC, Names New CEO". TechCrunch. https://techcrunch.com/2014/07/07/seeing-opportunities-in-the-us-itbit-relocates-to-nyc-names-new-ceo/. 
  13. ↑ 13.0 13.1 Chavez-Dreyfuss, Gertrude (5 September 2019). "Paxos gets U.S. regulator nod for gold-backed token, dollar-backed stablecoin". Reuters. https://www.reuters.com/article/us-crypto-currencies-paxos/paxos-gets-u-s-regulator-nod-for-gold-backed-token-dollar-backed-stablecoin-idUSKCN1VQ26P. 
  14. ↑ Vigna, Paul (7 May 2015). "BitBeat: ItBit Open Shop In U.S. As a Trust Company, Raises $25 Million". The Wall Street Journal. https://blogs.wsj.com/moneybeat/2015/05/07/bitbeat-itbit-open-shop-in-u-s-as-a-trust-company-raises-25-million/. ""It's an approach that is different from other bitcoin startups; itBit will be acting as a regulated fiduciary, responsible for holding its clients assets under the same rules that govern State Street and Rockefeller Trust Co."" 
  15. ↑ 15.0 15.1 Todd, Sarah (7 May 2015). "Bitcoin Exchange itBit Gets N.Y. Trust Charter, Bank Partner". American Banker. https://www.americanbanker.com/news/bitcoin-exchange-itbit-gets-ny-trust-charter-bank-partner. 
  16. ↑ 16.0 16.1 Chavez-Dreyfuss, Gertrude (10 September 2018). "New York regulator approves Winklevoss, Paxos dollar-linked tokens". Reuters. https://www.reuters.com/article/us-cryptocurrency-dollar-paxos-winklevos/new-york-regulator-approves-winklevoss-paxos-dollar-linked-tokens-idUSKCN1LQ1O5. 
  17. ↑ 17.0 17.1 Osipovich, Alexander (7 November 2019). "Blockchain Makes Inroads Into the Stock Market's $1 Trillion Plumbing System". The Wall Street Journal. https://www.wsj.com/articles/blockchain-makes-inroads-into-the-stock-markets-1-trillion-plumbing-system-11573131600. 
  18. ↑ "Blockchain System Cracks U.S. Equities Market for Certain Trades". Bloomberg Law. 20 February 2020. https://news.bloomberglaw.com/securities-law/blockchain-system-cracks-u-s-equities-market-for-certain-trades. 
  19. ↑ 19.0 19.1 Dillet, Romain (15 July 2020). "Revolut partners with Paxos to bring cryptocurrency trading to the US". TechCrunch. https://techcrunch.com/2020/07/15/revolut-partners-with-paxos-to-bring-cryptocurrency-trading-to-the-us/. 
  20. ↑ Irrera, Anna (21 October 2020). "PayPal to allow cryptocurrency buying, selling and shopping on its network". Reuters. https://www.reuters.com/article/paypal-cryptocurrency-idINL1N2HB14U. 
  21. ↑ Dillet, Romain (21 October 2020). "PayPal to let you buy and sell cryptocurrencies in the US". TechCrunch. https://techcrunch.com/2020/10/21/paypal-to-let-you-buy-and-sell-cryptocurrencies-in-the-us/. 
  22. ↑ "OANDA Joins Forces with Paxos to Develop Crypto Trading Ecosystem". Finance Magnates. 23 September 2022. https://www.financemagnates.com/forex/brokers/oanda-joins-forces-with-paxos-to-develop-crypto-trading-ecosystem/. 
  23. ↑ "Broker OANDA Rebrands, Launches Crypto Trading Service in US Market". Finance Magnates. 20 October 2022. https://www.financemagnates.com/cryptocurrency/broker-oanda-rebrands-launches-crypto-trading-service-in-us-market/. 
  24. ↑ Dillet, Romain (11 March 2020). "Blockchain (the company) lets you borrow USD PAX against collateral". TechCrunch. https://techcrunch.com/2020/03/11/blockchain-the-company-lets-you-borrow-usd-pax-against-collateral/. 
  25. ↑ Clifford, Tyler (16 September 2019). "CEO says Paxos offers investors 'confidence of a bank, but the innovation of Silicon Valley'". CNBC. https://www.cnbc.com/2019/09/16/ceo-says-paxos-merges-security-of-a-bank-and-silicon-valley-innovation.html. 
  26. ↑ Roberts, Jeff John (5 September 2019). "Crypto or Gold? Paxos Offers Both With First Gold-Backed Token". Fortune. https://fortune.com/2019/09/05/gold-cryptocurrency-paxos/. 
  27. ↑ "DFS Continues to Advance Responsible Growth in New York's Fintech Industry with New Virtual Currency Approvals". New York State Department of Financial Services (Press release). 14 June 2018. Archived from the original on 24 July 2020. Retrieved 24 July 2020.
  28. ↑ "Superintendent of Financial Services Linda A. Lacewell Announces Approval of First Gold-backed Virtual Currency in New York State". New York State Department of Financial Services (Press release). 5 September 2019. Archived from the original on 3 August 2020. Retrieved 30 July 2020.
  29. ↑ "Blockchain System Cracks U.S. Equities Market for Certain Trades". Bloomberg Law. 20 February 2020. https://news.bloomberglaw.com/securities-law/blockchain-system-cracks-u-s-equities-market-for-certain-trades. 



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