Binance’s $BUSD stablecoin is under more scrutiny. 😖
Binance’s partner, Paxos, issued a press release early this morning (6 AM EST), stating that they “… will cease issuance of new BUSD tokens as directed by and working in close coordination with the New York Department of Financial Services (NYDFS).”
Here are the main points:
- Minting of new BUSD tokens will halt on February 21, 2023.
- Paxos will continue to manage BUSD reserves.
- BUSD is and will always be backed 1:1 with U.S.-dollar-denominated reserves.
- Paxos to fully support BUSD as redeemable to onboarded customers through at least February 2024.
- New and existing customers can convert into USD or Paxos’s USD stablecoin, USDP.
- Proof-Of-Reserves Link
Additionally, Binance CEO CZ took to Twitter and addressed the issue:
#BUSD. A thread. 1/8
In summary, BUSD is issued and redeemed by Paxos. And funds are #SAFU!
— CZ 🔶 BNB (@cz_binance) February 13, 2023
The main points:
- Funds are SAFU.
- BUSD is wholly owned by Paxos.
- CZ anticipates BUSD’s market cap to decline over time.
- CZ says he has no info on any SEC vx. Paxos lawsuit.
- Assures that Binance will continue to support BUSD for the foreseeable future.
- Binance/CZ is, “reviewing other projects in those jurisdictions to ensure our users are insulated from any undue harm.”
Binance’s native token, $BNB, is taking a big hit on the news.
At the time of writing, BNB is down -9.11% and on heavy volume.
The day’s total volume is the highest since December 13, 2022, and the second-highest volume since November 10, 2022. 😱