There is an important difference between BUSD and USDs (Sperax USD). Binance's BUSD on is a wrapped version of Paxos' BUSD issued on Ethereum. And Paxos BUSD in accordance to its license by NYDFS must maintain and periodically report its reserves. And its reserves must be cash and cash equivalents. Verbatim: All stablecoins issued by DFS-regulated entities are required to be fully backed 1:1 by cash or cash equivalents. These reserves are regularly reviewed through third-party attestations and internal and external, independent reviews. So actually SEC might have two points of attention: (1) investment income (ultimate invested principal is those bank reserves) = check if BUSD is security or not. (2) Proof of reserves (SEC will check if the amount of BUSD in circulation matches that Paxos' reserves.) - check if NYDFS license respected by BUSD. And now what about USDs? First, USDs isn't connected with any cash or cash equivalents. All the collateral is 100% on-chain crypto. USDs in collateralized, but NOT by cash or cash equivalents. Second, USDs has not just proof of reserves (crypto reserves) but more strict proof of solvency (reserves+liabilities) - in real time and fully verifiable on-chain.