Binance stablecoin backer says U.S. SEC has labeled token an unregistered security

FILE PHOTO: Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration

WASHINGTON/LONDON (Reuters) - The firm behind Binance's stablecoin, Paxos Trust Company, said the U.S. Securities and Exchange Commission (SEC) has told the company it should have registered the product as a security and is considering taking action against the platform.

In a statement on Monday, Paxos said it disagreed with the SEC's allegations that Binance USD is a security and is "prepared to vigorously litigate if necessary."