Stablecoin issuer Paxos told employees it's in "constructive discussions" with the U.S. Securities and Exchange Commission (SEC) after getting a Wells notice about the Binance USD stablecoin coin.

"We look forward to continuing that dialogue in private. Of course, if necessary, we will defend our position in litigation," CEO Charles Cascarilla said in an email to employees. The company said last week that it categorically disagreed with the SEC's categorization of BUSD as a security.

Cascarilla also said the company would end its relationship with Binance, in what he said was a separate decision from the SEC Wells notice and the directive from the New York Department of Financial Services.

The firm has facilitated more than $2.8B in BUSD redemptions since announcing that it would stop issuing the stablecoin.