The Binance crypto exchange has expressed its intention to continue supporting and providing access to its highly sought-after Binance USD stablecoin despite the stop order issued against its issuer Paxos by American regulators.
The New York Department of Financial Services (NYDFS) has commanded blockchain firm Paxos to cease distributing their dollar-pegged stablecoin BUSD. The US Securities and Exchange Commission (SEC) also sent a Wells Notice claiming that BUSD is an unregistered security.
Binance CEO Changpeng ‘CZ’ Zhao has ensured that user funds remain protected despite the impending enforcement action. On Twitter on February 13, CZ noted that the NYDFS regulates Paxos, and the BUSD token is managed solely by Paxos.
CZ reported that Paxos would persist in servicing BUSD, guaranteeing redemptions and providing assurance of its reserves which various entities have scrutinized. As a result of the enforcement action taken, Binance’s CEO stated that the market cap for BUSD will lessen over time, and their exchange is looking into exploring non-USD-backed stablecoins.
Also, CZ declared that Binance would keep supporting the BUSD stablecoin on its exchange, though he admitted users might embrace other stablecoin tokens due to the enforcement action.
Binance is assessing “product adjustments,” with a shift from using BUSD as its main trading pair for several tokens. CZ warned that the steps taken by SEC and NYDFS could greatly influence cryptocurrency development in the long run. He also affirmed that if courts declare BUSD as a security, it could drastically alter how digital currencies progress.
CZ further acknowledged that ongoing regulatory uncertainty in certain countries necessitates extra caution when reviewing projects within those jurisdictions to protect customers from adverse effects. Recently, US regulators have been cracking down on several crypto service providers and tokens, especially Ripple, which is still battling the SEC over its XRP token
In February 2023, cryptocurrency exchange Kraken agreed to cease its staking services to United States clients and pay a hefty sum of $30 million in disgorgement, prejudgment interest, and civil penalties. The SEC imposed charges against the company for failing to register its crypto asset staking as a service program.
