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
^"Who We Supervise". New York State Department of Financial Services. Archived from the original on 23 May 2020. Retrieved 21 May 2020.
^Vigna, Paul (7 May 2015). "BitBeat: ItBit Open Shop In U.S. As a Trust Company, Raises $25 Million". The Wall Street Journal. Archived from the original on 9 August 2020. Retrieved 30 July 2020. 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.
