It turned out that a stop order was placed for the BUSD of Binance, the largest Bitcoin and altcoin exchange by daily trading volume. NYDFS has told Paxos Trust, which issues stablecoin BUSD, to cease issuance. Here are the details…
NYDFS has ordered a halt to this altcoin company
The New York Department of Financial Services (NYDFS) has reportedly ordered blockchain firm Paxos Trust to cease issuance of dollar-pegged Binance USD (BUSD) stablecoins. The New York regulator’s actions came shortly after the United States Securities and Exchange Commission (SEC) issued a notice to Paxos. The notice was a letter the regulator used to notify companies of planned enforcement actions. The notice claimed that Binance USD is an unregistered security.
NYDFS has reportedly requested Paxos to stop creating more BUSD tokens. According to a Binance statement, Paxos will continue to manage product refunds. The latest regulatory action on the third-largest stablecoin comes after increased scrutiny around the crypto market. The SEC announced that crypto staking services had violated securities law only last week, forcing Kraken to shut down its staking offering entirely. cryptocoin.com As we reported, Coinbase took the challenge, claiming that its staking products are not securities.
Securities debate continues
The discussion of securities in the crypto market has been going on for a long time. In fact, this issue has been on the agenda ever since the SEC sued Ripple, the blockchain company behind the XRP token. The case, which has been going on for three years, continues to be closely watched, but no conclusion has yet been reached. In general, if money is invested in a business with the expectation of making a profit through the efforts of someone other than the investor, it is considered a security.
However, for some, securities claims against a stablecoin could be a “new nail in the coffin” for crypto. One lawyer said that while stablecoins are intended to be stable, buyers could likely profit from a range of arbitrage, hedging and staking opportunities. Blockchain lawyers said that the answer to whether stablecoins are considered securities is not clear, but there is a need to think about whether the stablecoin was launched with the expectation of monetization or if it is a derivative of the security.
The BUSD ecosystem has grown exponentially, especially in 2021. Stablecoin has a market cap of around US$1 billion at the beginning of 2021, reaching over US$14.6 billion by the end of 2021. Currently, the market cap of the coin is around $16.1 billion. This makes it the third largest stablecoin by market cap.
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