Paxos Treasury Has Destroyed Over 400 Million BUSD Since Complying With Ban

Key Points:

• Since complying with the cease-and-desist order for Binance Stablecoins (BUSD), Paxos Treasury has destroyed Over 400 million BUSD.
• The NYDFS, on February 13, asked Paxos to stop issuing new stablecoin BUSD and end its relationship with Binance.

Paxos Treasury has recorded the destruction of about 419 million BUSD in the past two days. Yesterday, the crypto company complied with NYDFS’s order to cease the issuance of Binance Stablecoin (BUSD).

As mentioned in an earlier Coincu News article, Paxos Trust, the issuer of stablecoin Binance, was subject to a cease-and-desist order from US regulators. However, the stablecoin company promises that its product will always be 1:1, backed by US dollars, and will continue to process customer withdrawal requests until February 2024.

Since its implementation, the Paxos treasury has destroyed approximately 419 million BUSD. The destruction has taken place twice since February 13. Yesterday, Paxos Treasury burned 342 million BUSD. Today, recorded another 76,152,978 BUSD on the destroyed Ethereum chain.

According to sources from Bloomberg, Paxos competitor Circle reported to the New York watchdog last year about Paxos’ mismanagement of BUSD reserves.

Circle filed a complaint with the New York Department of Financial Services (NYDFS), which regulates both stablecoin issuers within New York state limits, claiming they had obtained evidence on the blockchain that Binance did not maintain sufficient collateral for the issued amount of BUSD.

Many speculate that Circle’s foul play stems from Binance introducing a discriminatory policy for BUSD in 2022 when converting the balances of all stablecoins deposited by users listed on the exchange trades into BUSD, excluding Tether (USDT). This has caused USDC’s market share to plummet.

Faced with this issue, Binance also said that even if Paxos delists or the market share of BUSD soon decreases, they will continue to support BUSD on their platform. Binance added that in order to “ensure our consumers are insulated from any excessive harm,” evaluations of other initiatives in certain countries would be required due to continued regulatory uncertainty in specific regions.

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