Argument for BUSD being a security:
🟢 BUSD is backed by Treasury securities, which makes it very similar to a money market fund, and BUSD holders are actually the holders of the fund's shares, i.e. the holders of the securities.
⏺ BUSD does not pass the Howie test because it does not provide any profit to the holders.
You can laugh at the SEC for a long time and at the fact that they do not understand what they are talking about, but you need to consider that, firstly, these guys are not stupid themselves, and secondly, they obviously have good advisers on securities. It is not necessary to earn on BUSD for it to be classified as a security. If someone holds or otherwise provides value to you, and you trust them to do so, that's enough.
The Securities Act of 1933 is pretty vague, and if the SEC wants to, it can put any asset under it. Therefore, it would be better if the SEC and Paxos agree and the case does not go to court. Otherwise, we will get another anchor on the next bullish cycle.
Here we are more interested in another question. Why BUSD? Why not USDP (which Paxos also manages)? Why not USDC, USDT? There is also collateral in treasury papers.