Binance CEO CZ reported that the exchange will make some product adjustments according to the decisions taken by the US regulators.
Paxos terminates its relationship with Binance
CEO Changpeng Zhao (CZ) has finally broken his silence to comment on the US regulator’s decision regarding the SEC’s investigation into Paxos. Ever since the alleged SEC investigation into Paxos broke out, its repercussions on stablecoins and the market have been debated. In particular, Paxos announced today that it will end its relationship with Binance in an announcement that lowered the BUSD price to as low as $0.995. cryptocoin.com We have included a summary of the development in this article.
CZ answers: What if BUSD is considered a security?
Binance CEO stated that if the court decides that BUSD is a security, it will have a profound impact on how the crypto market will move forward. However, this will be limited to the jurisdiction where the decision was made. CZ adds that his exchange will continue to support BUSD for the foreseeable future. Meanwhile, this investigation has led users to migrate from BUSD to other stablecoins. However, CZ assured that Binance will make some product adjustments based on the decisions taken.
CZ also stated that BUSD will continue to be fully supported by Paxos and will be available to all users until February 2024. However, new and existing Paxos users will be allowed to use their funds in US dollars. Users can also convert BUSD tokens to Pax Dollars (USDP).
Binance is making changes to these projects
The new moves of Binance announced by CZ suggest moving away from BUSD as the main trading pair. However, the exchange will also review other projects based on current regulatory uncertainty. Today, Paxos announced in an important announcement that it will not be printing new BUSD from February 21. This critical decision came at the behest of the New York Department of Financial Services (NYDFS). NYDFS alleges that Paxos’ stablecoin management has left it open to bad actors.
New York regulator says Paxos leaves the door open
NYDFS told Reuters today that Paxos’ BUSD administration has left it open to the use of bad actors. A spokesperson for the regulator said that Paxos “violated its obligation for BUSD customers issued by Binance and Paxos to conduct special, periodic risk assessments and due diligence refreshes to prevent malicious individuals from using the platform.”
The state’s financial regulators had previously instructed Paxos to cease production of Binance USD. The reason for this was several unresolved issues with Paxos overseeing its relationship with Binance. Paxos said it ended its relationship with Binance for BUSD production shortly after that. BUSD price declined as low as $0.0950 in response to the development.
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