Paxos Standard (PAX) is not directly accessible by law enforcement, as the crypto community fears, but the team has reserved the right to freeze tokens if required by the relevant authorities.
The team contacted Cryptovest to explain they would not give direct access to the code to law enforcement. However, the launch of the coin itself was contingent upon compliance with the New York State Department of Financial Services. Being a fully legalized asset, PAX abides by the rules that also affect traditional banks, namely, to restrict the potential for money laundering or terrorist funding.
“We believe that there is a healthy market - especially amongst institutional investors who are also regulated and can only work with financial institutions like ours - who prefer to work with regulated and compliant entities and want the protection and stability of the government,” the team explained.
But for regular crypto users, the potential for freezing funds is seen as worrisome. Despite the fact that law enforcement cannot affect the coin directly, the possibility of freezing and burning tokens is considered an unacceptable level of centralization. The policy of PAX states:
"We may freeze, temporarily or permanently, your use of, and access to, PAX or the US dollars backing your PAX, with or without advance notice, if we are required to do so by law, including by court order or other legal processes."
PAX, along with Gemini Dollar (GUSD), represents a new generation of crypto assets, pegged to the US dollar and characterized by full legalization and backing.
According to Etherscan, PAX has a total supply of 13,166,187.16 tokens. At the time of writing, these are held in 106 addresses, the top five of them accounting for 86% of the total. The most recent exchange listing for PAX is on BCEX.