Is Paxos Gold Safe?
Risk Grade: B+ (20/100)
Paxos Gold is rated as moderate risk — some novel mechanisms, generally well-understood.
Moderate risk — real gold backing with monthly audits is strong, but regulatory shutdown precedent from BUSD creates existential tail risk
A token backed 1:1 by physical gold bars stored in professional vaults, regulated by New York financial authorities. It holds $2.2B worth of gold and is one of two dominant tokenized gold products. Its B- grade comes from the precedent of Paxos being forced to shut down its BUSD stablecoin in 2023, proving regulators can terminate even compliant products.
TVL
$2.6B
Mechanisms
5
Interactions
5
Value Grade
A-
Key Risks for Paxos Gold Users
Paxos was forced by New York regulators to shut down its BUSD stablecoin in 2023 -- the same regulators oversee PAXG and could do it again
PAXG and one competitor control 80% of the $5.5B tokenized gold market -- a crisis in either product would devastate the entire sector
If Paxos announces a wind-down, early redeemers get their gold while latecomers may be stuck with cash at a discount
Top Risk Factors
- •BUSD wind-down precedent: Paxos was forced by NYDFS to cease BUSD operations in 2023, demonstrating that even federally chartered products can be shut down by regulators — a risk class that applies to PAXG.
- •OCC conversion deadline: Paxos must complete federal trust charter conversion by June 2026 or remain under dual NYDFS/OCC oversight. Any delay or condition failure creates regulatory uncertainty.
- •Market concentration: PAXG + XAUT control ~97% of tokenized gold; a crisis in either product would devastate sector credibility and liquidity for the other.
Risk Score Breakdown
Paxos Gold's highest risk area is Regulatory Risk (9/10). Here's how each dimension contributes to the overall 20/100 score:
Read the Full Paxos Gold Risk Report
This protocol has 2 collapse scenarios. See the full mechanism classification, interaction matrix, and deep-dive recommendations.
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