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{"actor":"system:backfill","investigation_id":"bef015c8-13b9-43a5-ba7e-4bea2f6e8fb6","kind":"publish","page_slug":"paxos-and-usdg","published_at":"2026-10-13T05:27:15.662Z","sequence_num":1,"snapshot":{"content_type":"investigation","entity_name":"Paxos and USDG","sections":[{"content":"Paxos's developer documentation states that USDG is issued by Paxos Digital Singapore Pte. Ltd., a Major Payments Institution supervised by the Monetary Authority of Singapore, and that cash and cash-equivalent reserve assets are held in segregated accounts. Paxos says it publishes monthly reserve-composition reports and attestation reports from an independent third-party accounting firm. Paxos's USDG transparency page lists monthly reports for January through August 2026, with KPMG LLP as the attestation firm for reports posted on or after 27 February 2026 and Enrome LLP for earlier reports; the page states that these follow standards of the Institute of Singapore Chartered Accountants. The transparency page itself does not state total reserves or composition (these are in the linked reports, which were not reviewed for this page). Per the Global Dollar press release, USDG is redeemable 1:1 for US dollars and EU holders have a redemption right against Paxos Issuance Europe. Attestations are point-in-time examinations, not an audit of the issuer's financial statements, and no live reserve dashboard was identified. Current supply figures were not verified from a primary source and are omitted.","heading":"USDG issuance, reserves and attestations","severity":"low","sources":[{"credibility":2,"name":"Paxos docs: USDG","type":"official","url":"https://docs.paxos.com/guides/stablecoin/usdg.md"},{"credibility":2,"name":"Paxos USDG transparency page","type":"official","url":"https://www.paxos.com/usdg-transparency"},{"credibility":2,"name":"Global Dollar: USDG on Robinhood Chain press release","type":"official","url":"https://globaldollar.com/newsroom/usdg-is-now-available-on-robinhood-chain-as-the-lending-asset-in-robinhood-s-new-earn-product"}]},{"content":"USDG is issued by Paxos Digital Singapore under MAS supervision and, for the EU, by Paxos Issuance Europe under MiCA, according to Paxos and Global Dollar materials and press coverage. Separately, law-firm summaries report that the US OCC conditionally approved, in December 2025, the conversion of Paxos Trust Company, LLC (a New York state trust company) into an uninsured national trust bank, Paxos Trust Company, National Association, in a batch with Circle, Ripple, BitGo and Fidelity Digital Assets. The approval is preliminary and subject to pre-opening requirements; final status was not confirmed. A separate 2021 preliminary OCC approval for a de novo Paxos national trust is older and distinct.","heading":"Regulatory status","severity":"low","sources":[{"credibility":2,"name":"Steptoe: OCC conditionally approves five national trust bank charter applications","type":"other","url":"https://www.steptoe.com/en/news-publications/occ-conditionally-approves-five-national-trust-bank-charter-applications.html"},{"credibility":2,"name":"Paxos docs: USDG","type":"official","url":"https://docs.paxos.com/guides/stablecoin/usdg.md"},{"credibility":3,"name":"Value the Markets: Robinhood Earn overview","type":"news_article","url":"https://www.valuethemarkets.com/cryptocurrency/news/an-overview-of-robinhood-earn-and-its-stablecoin-savings-product"}]},{"content":"On 7 August 2025 the New York Department of Financial Services announced a settlement with Paxos Trust Company totaling $48.5 million: a $26.5 million penalty and $22 million for compliance program improvements. According to The Block, NYDFS found that Paxos did not conduct sufficient due diligence on its Binance USD (BUSD) partnership and that its anti-money-laundering program had shortcomings, including accepting Binance's assurances on geofencing controls without independent review. NYDFS had ordered Paxos to stop minting BUSD in 2023. Paxos said the issues were identified more than two years earlier, were fully remediated and that there was no impact on customer accounts or consumer harm; NYDFS said Paxos cooperated. This concerned BUSD, not USDG.","heading":"NYDFS settlement over Binance BUSD partnership","severity":"high","sources":[{"credibility":2,"name":"The Block: Paxos settles with NYDFS for $48.5 million","type":"news_article","url":"https://www.theblock.co/post/366002/paxos-settles-with-new-york-financial-regulator-for-48-5-million-over-involvement-with-binance-busd-partnership"},{"credibility":2,"name":"Ledger Insights: NYDFS fines Paxos $26.5M over Binance's BUSD","type":"news_article","url":"https://www.ledgerinsights.com/nydfs-regulator-fines-paxos-26-5m-over-binances-busd-stablecoin/"}]},{"content":"On 15 October 2025 Paxos, issuer of PayPal's PYUSD, minted about 300 trillion PYUSD on Ethereum in what it called a technical error, from a Paxos hot wallet to the PYUSD contract. Paxos stated it burned the excess, that there was no security breach, that customer funds were safe and that the root cause was addressed. The Block reported resolution within 30 minutes; Aave temporarily froze PYUSD markets and the token briefly moved off its peg. A decimal error was a third-party suggestion, not confirmed by Paxos. The incident involved PYUSD, not USDG, but is relevant to the issuer's operational controls.","heading":"PYUSD erroneous mint (October 2025)","severity":"medium","sources":[{"credibility":2,"name":"The Block: Paxos mistakenly mints $300 trillion PYUSD","type":"news_article","url":"https://www.theblock.co/post/374870/paxos-mistakenly-mints-300-trillion"},{"credibility":2,"name":"Unchained: Paxos accidentally mints 300 trillion PYUSD","type":"news_article","url":"https://unchainedcrypto.com/paxos-accidentally-mints-300-trillion-pyusd/"}]},{"content":"The Global Dollar Network, a consortium distributing USDG and sharing reserve yield with members, launched around 1 November 2024 with founders including Robinhood, Kraken, Galaxy Digital, Nuvei, Bullish and Anchorage Digital; Fortune reported Mastercard joined in June 2025. A Global Dollar press release dated 1 July 2026 states USDG is live on Robinhood Chain, an Arbitrum-based layer 2, and is the default lending asset in Robinhood's onchain Earn product, with deposits placed in DeFi protocols via curated vaults. Secondary coverage describes the yield as variable, routed through DeFi lenders such as Morpho, and not an FDIC-insured savings account. Users therefore bear smart-contract and lending-protocol risk in addition to stablecoin issuer risk. Robinhood's own chain documentation lists Paxos/USDG in its ecosystem table but did not describe Earn when fetched. The consortium's revenue sharing creates a commercial incentive for distributors, which readers may wish to weigh.","heading":"Global Dollar Network and Robinhood Chain Earn","severity":"medium","sources":[{"credibility":2,"name":"Global Dollar: USDG on Robinhood Chain press release","type":"official","url":"https://globaldollar.com/newsroom/usdg-is-now-available-on-robinhood-chain-as-the-lending-asset-in-robinhood-s-new-earn-product"},{"credibility":1,"name":"Fortune: Mastercard joins USDG stablecoin group","type":"news_article","url":"https://www.fortune.com/crypto/2025/06/24/mastercard-usdg-stablecoin-pyusd-fiused-paypal-fiserv"},{"credibility":3,"name":"Value the Markets: Robinhood Earn overview","type":"news_article","url":"https://www.valuethemarkets.com/cryptocurrency/news/an-overview-of-robinhood-earn-and-its-stablecoin-savings-product"},{"credibility":2,"name":"Robinhood Chain docs","type":"official","url":"https://docs.robinhood.com/chain"}]}],"sources_used":[{"credibility":2,"name":"Paxos docs: USDG","type":"official","url":"https://docs.paxos.com/guides/stablecoin/usdg.md"},{"credibility":2,"name":"Paxos USDG transparency page","type":"official","url":"https://www.paxos.com/usdg-transparency"},{"credibility":2,"name":"Global Dollar: USDG on Robinhood Chain press release","type":"official","url":"https://globaldollar.com/newsroom/usdg-is-now-available-on-robinhood-chain-as-the-lending-asset-in-robinhood-s-new-earn-product"},{"credibility":2,"name":"The Block: Paxos NYDFS settlement","type":"news_article","url":"https://www.theblock.co/post/366002/paxos-settles-with-new-york-financial-regulator-for-48-5-million-over-involvement-with-binance-busd-partnership"},{"credibility":2,"name":"Ledger Insights: NYDFS fines Paxos","type":"news_article","url":"https://www.ledgerinsights.com/nydfs-regulator-fines-paxos-26-5m-over-binances-busd-stablecoin/"},{"credibility":2,"name":"The Block: PYUSD erroneous mint","type":"news_article","url":"https://www.theblock.co/post/374870/paxos-mistakenly-mints-300-trillion"},{"credibility":2,"name":"Unchained: PYUSD erroneous mint","type":"news_article","url":"https://unchainedcrypto.com/paxos-accidentally-mints-300-trillion-pyusd/"},{"credibility":2,"name":"Steptoe: OCC conditional approvals","type":"other","url":"https://www.steptoe.com/en/news-publications/occ-conditionally-approves-five-national-trust-bank-charter-applications.html"},{"credibility":1,"name":"Fortune: Mastercard joins USDG group","type":"news_article","url":"https://www.fortune.com/crypto/2025/06/24/mastercard-usdg-stablecoin-pyusd-fiused-paypal-fiserv"},{"credibility":3,"name":"Coin360: USDG stablecoin initiative","type":"news_article","url":"https://coin360.com/news/usdgs-stablecoin-initiative"},{"credibility":3,"name":"Value the Markets: Robinhood Earn overview","type":"news_article","url":"https://www.valuethemarkets.com/cryptocurrency/news/an-overview-of-robinhood-earn-and-its-stablecoin-savings-product"},{"credibility":2,"name":"Robinhood Chain docs","type":"official","url":"https://docs.robinhood.com/chain"}],"summary":"Paxos is a regulated stablecoin issuer and infrastructure provider; its Singapore entity issues USDG (Global Dollar), the lending asset in Robinhood Chain's Earn product, and Paxos Issuance Europe issues it under MiCA. Paxos publishes monthly reserve reports and third-party attestations for USDG. It paid a 2025 NYDFS settlement over its Binance BUSD partnership and had a 2025 erroneous PYUSD mint that it said was reversed without customer loss.","timeline":[{"date":"2024-11","event":"Global Dollar Network launched with Paxos and founding partners including Robinhood and Kraken.","source":"Coin360 / press coverage","source_url":"https://coin360.com/news/usdgs-stablecoin-initiative"},{"date":"2025-06","event":"Mastercard joined the Global Dollar Network.","source":"Fortune","source_url":"https://www.fortune.com/crypto/2025/06/24/mastercard-usdg-stablecoin-pyusd-fiused-paypal-fiserv"},{"date":"2025-08-07","date_evidence":"August 7, 2025, 10:54AM EDT","event":"NYDFS announced $48.5 million settlement with Paxos Trust over Binance BUSD partnership.","source":"The Block","source_url":"https://www.theblock.co/post/366002/paxos-settles-with-new-york-financial-regulator-for-48-5-million-over-involvement-with-binance-busd-partnership"},{"date":"2025-10-15","date_evidence":"October 15, 2025, 11:18PM EDT","event":"Paxos erroneously minted about 300 trillion PYUSD and burned it; Paxos said no breach occurred.","source":"The Block","source_url":"https://www.theblock.co/post/374870/paxos-mistakenly-mints-300-trillion"},{"date":"2025-12","event":"OCC conditionally approved conversion of Paxos Trust Company to a national trust bank.","source":"Steptoe","source_url":"https://www.steptoe.com/en/news-publications/occ-conditionally-approves-five-national-trust-bank-charter-applications.html"},{"date":"2026-02","event":"KPMG LLP began issuing USDG attestations (reports posted on or after 27 February 2026).","source":"Paxos USDG transparency page","source_url":"https://www.paxos.com/usdg-transparency"},{"date":"2026-07-01","date_evidence":"dated July 1, 2026","event":"USDG went live on Robinhood Chain as the lending asset in Robinhood Earn.","source":"Global Dollar press release","source_url":"https://globaldollar.com/newsroom/usdg-is-now-available-on-robinhood-chain-as-the-lending-asset-in-robinhood-s-new-earn-product"}]},"v":1}