Layoffs of 65 employees announced by Paxos, with the company shifting its focus solely towards tokenization services.

Paxos Streamlines Operations and Focuses on Stablecoins

In a significant move, Paxos, the digital asset infrastructure provider, announced layoffs of 65 employees, representing approximately 20% of its workforce. The decision was made to streamline operations and concentrate resources on core growth areas such as stablecoins (including PAXG) and tokenization, while winding down less central services like post-trade settlement for securities and commodities.

Despite the layoffs, Paxos remains in a strong financial position, with over $500 million in cash and assets on its balance sheet following a $540 million raise. This cautious move reflects management's strategy to extend financial runway and focus resources on its core business.

Focus on Stablecoins and Tokenization

Paxos' treasury management is characterized by ample liquidity, low-risk capital deployment, and strategic allocation to regulated operations. The company maintains a fully reserved treasury for its PAXG stablecoin, which is backed 1:1 by physical gold, reinforcing trust and operational stability for stakeholders.

The company's CEO, Chad Cascarilla, believes that stablecoins will 10x in the coming years and serve as the fulcrum for opening the financial system through tokenization. This focus on stablecoins is evident in the recent launch of Lift Dollar, a yield-bearing stablecoin.

Regulatory Push

Paxos is actively seeking to expand its regulatory framework by applying for a national trust bank charter with the U.S. Office of the Comptroller of the Currency (OCC). If approved, this charter would replace its limited purpose trust charter from New York and allow Paxos to operate more efficiently across states under federal oversight. However, the charter does not authorize traditional banking activities like accepting deposits or issuing loans but would enhance Paxos’s custodial and trust services essential to its stablecoin business.

Compliance Measures

This latest effort follows a $26.5 million settlement with the New York Department of Financial Services (NYDFS) related to compliance issues in its Binance partnership, which likely influenced its refreshed regulatory approach. Affected employees will receive 13 weeks of severance pay, three months of subsidized health insurance, three months of outplacement support, and a two-year extension to exercise vested options.

Paxos also provided payments and benefits to workers with approved parental or medical leave as part of the separation package. The company gave second-quarter bonuses to employees who were on a quarterly incentive program.

In conclusion, Paxos' strategic moves reflect a calibrated approach to maintain strong financial health, regulatory alignment, and leadership in stablecoins and tokenization amid evolving crypto regulatory landscapes. The company's focus on stablecoins, regulatory compliance, and operational efficiency positions it well for future growth in the digital asset industry.

Key points:

Layoffs: 65 employees laid off, representing approximately 20% of Paxos' workforce.
Financials: Paxos has over $500 million in cash and assets on its balance sheet.
Business focus: Prioritizing stablecoins (PAXG) and tokenization; winding down non-core services.
Regulatory: Applying for a U.S. national trust bank charter to gain streamlined federal oversight enhancing compliance and operational scalability.
Compliance: Settled a $26.5M NYDFS enforcement action in August 2025 over AML and compliance deficiencies, prompting regulatory diligence.
Employee Support: Affected employees will receive severance pay, health insurance, outplacement support, and a two-year extension to exercise vested options.
Bonuses: Second-quarter bonuses given to employees on a quarterly incentive program.
Parental/Medical Leave: Paxos provided payments and benefits to workers with approved parental or medical leave as part of the separation package.
Phasing Out Settlement Services: Paxos is phasing out its settlement services in commodities and securities.

Layoffs of 65 employees announced by Paxos, with the company shifting its focus solely towards tokenization services.