Binance Confirms It Has Been Told By Paxos To Stop Minting New BUSD Tokens

Key Points:

• Binance says it’s been told Paxos to halt minting new BUSD.
• Paxos will maintain the product, oversee redemptions, and provide follow-up with more details as needed.
• According to Paxos, which is governed by the New York State Department of Financial Services, Binance USD reserves are maintained in cash and Treasury securities.

According to Bloomberg News, the crypto exchange Binance stated that Paxos Trust Co. informed the exchange that it had been instructed to stop minting the new stablecoin BUSD.

A Binance spokesperson said:

“Paxos has informed us that they have been directed to cease minting new BUSD by the New York State Department of Financial Services. BUSD is a stablecoin wholly owned and managed by Paxos. As a result, BUSD market cap will only decrease over time. Paxos will continue to service the product, manage redemptions, and will follow-up with additional information as required. Paxos also assured the funds are safe, and fully covered by reserves in their banks.”

BUSD is a key component of the billionaire Binance ecosystem and has a market value of $16 billion. The most recent occurrences demonstrate how the US is putting increasing pressure on the digital asset market following a $2 trillion route and the collapse of the FTX exchange.

Even while Bitcoin is largely steady, Binance Coin (BNB), the exchange’s native cryptocurrency, fell as much as over 4% on Monday.

The SEC has escalated its enforcement of cryptocurrency laws against major market players. The Kraken platform, owned by Payward Inc., agreed last week to halt providing crypto staking services in the US and to forfeit $30 million in fines to the SEC. By temporarily transferring their cryptocurrency tokens to a middleman or a cryptocurrency network, investors can earn a return through staking.

Previously, according to the Wall Street Journal, the Securities and Exchange Commission aimed to sue Paxos for listing the Binance USD coin. The notice alleges that Binance USD, a digital asset that Paxos issues and lists, is unregistered security.

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Harold

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