New York regulators have ordered Paxos to stop issuing Binance’s BUSD stablecoin, according to a report from the Wall Street Journal. The cryptocurrency figures prominently in the reserves of the cryptocurrency giant, so the announcement could have particularly severe consequences for the sector.
Paxos Ordered to Stop Issuing Binance BUSD?
The news was originally reported by the Wall Street Journal, which indicates that the Paxos firm will no longer be able to issue Binance’s BUSD, following a request from New York regulators. This means that emissions of new tokens are now blocked. According to Binance, users will be able to continue exchanging their BUSD for dollars.
A Binance spokesperson confirmed to our colleagues at The Block the information:
” Paxos has informed us that they have been ordered to stop minting new BUSD. […] It follows that the capitalization of the BUSD will gradually reduce.»
We already knew that the United States Securities and Exchange Commission (SEC) was planning a legal initiative against Paxos, but the decision is sudden, and unexpected for the ecosystem.
👉 To go further – Kraken, Coinbase, Binance US… Faced with the SEC crusade, the resistance is organized
The best way to secure your cryptocurrencies 🔒
🔥 The world leader in crypto security
BUSD powers part of the Binance machine
BUSD is currently the third most important stablecoin in the market, with a capitalization of more than 16 billion dollars. Another point of concern: the BUSD represents a significant part of Binance’s reserves. Last November, the firm confirmed that the BUSD matched $21 billion of its $71 billion reserve.
If the BUSD falls, it is therefore a significant part of the Binance empire that is threatened. Faced with this, Changpeng Zhao, the company’s CEO, was as usual reassuring, inviting users to ignore the “FUD”:
4 https://t.co/6f27u0mqp1
— CZ 🔶 Binance (@cz_binance) February 13, 2023
Still, it was a particularly targeted blow that the SEC brought to Binance. It will be necessary to monitor the consequences in the hours and days to comegiven the prominent place of the company in the ecosystem.
👉 Listen to this article and all other crypto news on Spotify
🎁 Cryptoast Research Launch Offer
1st Newsletter Free with the code TOASTNL
Source: Wall Street Journal,The Block
Newsletter 🍞
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your ability to lose part of this savings. Do not invest if you are not ready to lose all or part of your capital.
To go further, read our Financial Situation, Media Transparency and Legal Notices pages.
Journalist at Cryptoast, I fell into the pot of cryptocurrencies a few years ago. I am passionate about the innovative technologies that stem from the blockchain and I like to find the most crispy information to share with you.
Marine Debelloir
2286 items
