The New York City Department of Financial Services has ordered the Binance BUSD stablecoin to cease issuance following its recognition as an unregistered security. The Paxos company responsible for the token has already agreed with the decision of the authorities, stopping cooperation with the crypto exchange.

$500M Withdrawn From Binance In One Hour Amid US Government Ban On Issuing BUSD Stablecoin

Starting February 21, Paxos will stop issuing new BUSD stablecoins that have been created in cooperation with Binance since 2019: the existing 16.5 billion tokens can be exchanged for USDP at a 1:1 ratio.

Since the token’s launch, the crypto exchange has been actively motivating users to choose it in their calculations. However, after the decision of the New York Department of Financial Services to ban the issuance of the coin became known, the head of Binance, Changpeng Zhao disowned of the stablecoin.

Its users immediately reacted to the negative news about the largest crypto exchange. By data 0xScope service, in just one hour, more than $500 million was transferred from Binance wallets to other exchanges. Approximately $439 million was on the Ethereum blockchain, while another $102 million was on the Binance Smart Chain.

Crypto exchange BNB’s proprietary token fell 6% against the backdrop of the news, and the stablecoin BUSD itself, which caused Binance’s troubles, is about to lose its peg to the US dollar, trading around $0.98 .

At the moment, BUSD remains the seventh largest cryptocurrency in the world in terms of total trading volume, which is why the situation casts a shadow over the entire cryptocurrency industry. At the time of writing, Ethereum is already down 2.24%, dragging the rest of the altcoins down with it.

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Author:

Grigory Shcheglov

Source: RB

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I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.

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