Despite the U.S. SEC and New York regulators ordering Paxos to stop minting BUSD, Binance CEO Changpeng “CZ” Zhao said the exchange will support BUSD.
Despite a halt order from American regulators, Binance will support its Binance USD stablecoin.
The NYDFS has ordered Paxos to stop releasing dollar-pegged stablecoin BUSD. Paxos got an SEC wells notice claiming BUSD is an unregistered security.
Binance CEO Changpeng ‘CZ’ Zhao has assured users that assets are safe despite the police action. On Feb. 13, Paxos tweeted that BUSD is “wholly owned and operated by Paxos” and controlled by the NYDFS.
Zhao stated that Paxos will continue to service BUSD and manage redemptions and that its reserves have been reviewed by numerous parties. The Binance CEO claimed BUSD market cap will decline and the exchange will investigate non-USD stablecoins after the enforcement action.
Zhao said that Binance will continue to support the stablecoin on its exchange, albeit users may switch to other stablecoin tokens due to the enforcement action.
Binance will also make “product modifications” and stop utilizing BUSD as its principal trading pair for several coins. Binance’s CEO warned that SEC and NYDFS moves might harm the cryptocurrency ecosystem:
“”IF” BUSD is ruled as a security by the courts, it will have profound impacts on how the crypto industry will develop (or not develop) in the jurisdictions where it is ruled as such.”
Zhao said that legislative uncertainty in certain areas may need assessments of other initiatives in those jurisdictions “to ensure our consumers are protected from any unnecessary harm.”
American officials have recently targeted many cryptocurrency service providers and tokens. Ripple and the SEC are still fighting over whether XRP is a securities.
In February 2023, Kraken paid $30 million in disgorgement, prejudgment interest, and civil penalties to the SEC and stopped staking U.S. clients. The regulator charged Kraken with failing to register its crypto asset staking-as-a-service business.
