Paxos Wins SEC Clearing Agency Approval for Blockchain Settlement Business

Paxos has secured a U.S. market-structure approval for its blockchain settlement business, giving one of crypto’s largest infrastructure firms a clearer path into the post-trade layer of traditional securities markets.

The company said Thursday that Paxos Securities Settlement Company, LLC has been granted registration as a clearing agency by the U.S. Securities and Exchange Commission under Section 17A of the Securities Exchange Act of 1934. The SEC’s order describes the approval as temporary registration, but the milestone still places Paxos in a rare category for a blockchain-native firm inside regulated U.S. securities infrastructure.

The registration allows Paxos Securities Settlement Company to provide clearing and settlement services for eligible securities as a central securities depository in the United States. In practice, that puts Paxos closer to the back-office systems that handle ownership transfer, settlement timing and operational finality after a trade is executed.

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Paxos framed the approval as the next step in a process that began years before tokenization became a mainstream capital-markets theme. CEO and co-founder Charles Cascarilla said the registration was “the result of seven years of work with the SEC,” beginning with a 2019 no-action letter and a settlement pilot involving major financial institutions.

That pilot started in February 2020 under SEC no-action relief and allowed Paxos to clear and settle U.S. equities daily with participation from large global firms. Paxos said the work showed blockchain-based post-trade infrastructure could support same-day settlement, lower costs and improve operational efficiency within a regulated framework.

The approval arrives as tokenized securities, stablecoins and on-chain settlement tools move closer to the language of banks, brokers and public-market infrastructure providers. For Paxos, the license adds another regulated piece to a platform already used by companies including PayPal (NASDAQ: $PYPL), Interactive Brokers (NASDAQ: $IBKR) and Mastercard (NYSE: $MA).

Paxos now has a regulated opening into one of the most important layers behind securities trading.