Changpeng Zhao, Binance CEO, recently announced that the exchange will still support BUSD. The statement was issued after New York regulators and the SEC ordered Paxos to restrict the stablecoin’s minting.
The New York Department of Financial Services (NYDFS) told Paxos, the company that made the stablecoin, to stop making the dollar-pegged stablecoin BUSD. Paxos has announced that it will soon halt the minting of BUSD. and also it would end its relationship with Binance for the issuance of BUSD.
In addition, the Securities and Exchange Commission (SEC) alleges that the stable coin is an unregistered security. Changpeng Zhao has nonetheless assured users that the funds will remain safe despite the action.
The CEO released an official Twitter thread that covered the entire situation. The tweets assured users that reserves would be made while being audited by several parties. However, the enforced action will cause the BUSD market capitalization to decrease over time.
Now, the exchange will also explore non-US dollar-based stablecoins. According to Zhao, Binance will support BUSD on the platform while users can shift to other stablecoins. It also means that Binance is also considering product adjustments.
Zhao continued by stating that if the courts rule on BUSD security, it will trigger huge impacts on the crypto industry. The running regulatory uncertainty in the market has necessitated reviews of similar projects. This is the only way to ensure that users remain insulated from undue harm.
US regulators have targeted multiple crypto tokens and service providers in the past few years. The SEC vs. Ripple case is the catalyst for this trend, which is still ongoing.
On the other hand, Kraken has recently agreed to restrict its staking services to US-based clients. The crypto exchange paid the SEC 30 million dollars in civil penalties, disgorgement, and prejudgment interest.
As regulators tighten their stance, exchanges and crypto enthusiasts are being warned of the repercussions it brings.