Paxos is a Trust Company regulated by the New York State Department of Financial Services (NYDFS). When assets are placed into our custody, they’re held for your benefit in bankruptcy remote and completely segregated accounts. In particular:
PAX Gold Insurance
Our vault provider maintains insurance against loss of the gold held in custody by Paxos for the benefit of PAX Gold token holders. As such, allocated gold-backed PAX Gold tokens are protected both in the vault facilities and in transit.
Availability of FDIC Insurance for Stablecoin Reserves
We are required to maintain reserves against our USD-backed stablecoins, such as Pax Dollar (USDP) or Binance USD (BUSD), in circulation. We maintain those reserves on behalf of the stablecoin holders as either or both (i) fiat cash in dedicated omnibus accounts at FDIC-insured U.S. banks and/or (ii) U.S. Treasury bills (including through repurchase agreements and/or money-market funds invested in U.S. Treasury bills).
- For reserve amounts maintained in cash at FDIC-insured banks, stablecoin holders that are or become Paxos’s customers are eligible for FDIC pass-through insurance, up to $250,000, for the portion of the reserves held in cash and represented by a Paxos customer’s stablecoins.
- Reserves held in U.S. Treasury bills (including through repurchase agreements and/or money-market funds invested in U.S. Treasury bills) are not FDIC-insured, but the Treasury bills themselves are backed by the full faith and credit of the United States government.
To sign up for FDIC pass-through insurance for the fiat cash portion of reserves backing our stablecoins, please submit your information here. We are required to maintain records of our customer’s information and of how the fiat cash reserves at FDIC-insured U.S. banks are allocated to our customers in order for customers to obtain FDIC pass-through insurance.