Who is the interested party for this collateral application?
Paxos Trust Company (the entity behind Paxos Standard (“PAX”))
Provide a brief high-level overview of the project, with a focus on the applying collateral token.
PAX is a fully regulated USD-backed stablecoin issued by Paxos Trust Company with approval from the New York Department of Financial Services (NYDFS). PAX is fully-collateralized (1:1) with USD.
Provide a brief history of the project.
Paxos Trust Company (then itBit) received its trust charter on October 5, 2015 making the company the first regulated trust company in the digital asset space. PAX was approved by the NYDFS on September 10, 2018 and launched the same day
Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.
Ethereum Address - Note that this uses the OpenZeppelin proxy pattern
Link any available audits of the project. Both procedural and smart contract focused audits.
The PAX smart contracts are audited by Nomic Labs, ChainSecurity, and Trail of Bits. Full audit reports are available at our GitHub repository. The contract has been upgraded with additional functionality that was reviewed as part of the PAX Gold contract audits.
Additionally, Paxos Trust Company has engaged Withum, a nationally top-ranking auditing firm, to independently verify at specific points in time that the entire supply of Paxos Standard tokens is consistent with USD in reserve accounts at U.S. banks held and managed by Paxos.
Withum performs month-end attestations of these accounts using standards established by the AICPA. Every attestation report that has been published since the launch of Paxos Standard can be viewed here.
Link to any active communities relating to your project.
How is the applying collateral type currently used?
Today, Paxos Standard can be used to limit exposure to crypto-asset volatility, to remove cross-border transaction fees and to move between crypto-assets with ease or as payment for other blockchain-based assets. While the largest demand today is being driven by the first use case above, we are seeing a significant wave of building and interest in the non-crypto trading use cases.
Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?
Paxos Trust Company, a New York limited purpose trust company domiciled and headquartered in New York, manages the smart contracts and issuance of PAX. Paxos Trust Company is a qualified custodian under New York law, and in that capacity bears full legal responsibility for custodying the US dollar reserves underlying PAX.
Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.
Paxos has obtained legal memoranda from two major international law firms, Davis Polk & Wardwell LLP and Norton Rose Fulbright LLP, regarding the regulatory standing of PAX as it relates to US and UK jurisdiction, respectively. The UK memo, in turn, commented upon broader trends in EU law. Consistent with standard industry practice in these jurisdictions, the firms require that Paxos not share these memoranda with third parties without certain non-disclosure/non-reliance agreements. However, Paxos can disclose that based on the legal advice provided in these memoranda from US and UK counsel, Paxos has concluded that PAX is operating consistent with the laws and regulations of these jurisdictions.
Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.
Paxos is a Limited Purpose Trust Company chartered since 2015 by the NYDFS. NYDFS approved the issuance of PAX on September 10, 2018, making PAX the first fully regulated digital asset. Both Paxos and its affiliate, Paxos Global Pte. Ltd. (“Paxos Global”), are registered with the Financial Crimes Enforcement Network (“FinCEN”). And Paxos Global is currently applying for licensing with the Monetary Authority of Singapore (“MAS”) under Singapore’s Payment Services Act.
List any possible oracle data sources for the proposed Collateral type.
As Paxos Standard is always redeemable 1:1 with a US dollar, it can be treated the same as USDC and be pegged 1:1 to Dai.