the staff of the Ridgewood blog
Ridgewood NJ, Paxos has been ordered by New York regulators to stop issuing Binance USD due to concerns that it can’t safely issue the token. The SEC is planning to sue Paxos for violating investor protection laws. It reportedly sent a notice to Paxos to inform the company of potential violations and enforcement actions. Paxos will stop issuing new BUSD tokens on February 21. The stablecoin will remain fully supported by Paxos until at least February 2024. Binance will support BUSD for the foreseeable future.
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The New York Department of Financial Services (NYDFS) is investigating stablecoin issuer Paxos. According to a report, it was rival stablecoin issuer Circle that tipped off the NYDFS. The NYDFS has told Paxos to stop minting BUSD. The US SEC is planning to sue Paxos for issuing an unregistered security and the Office of the Comptroller of the Currency may ask Paxos to withdraw its application for a full banking charter.
Binance saw around $831 million in net outflows over 24 hours following news of a regulatory crackdown on BUSD. BUSD is the largest asset in Binance’s reserves after USDT. It accounts for around 22% of Binance’s $60 billion of assets. Binance CEO Changpeng Zhao has assured investors that customers’ funds are safe.