Due to the fact that the stablecoin does not satisfy Coinbase’s listing requirements, the cryptocurrency exchange platform has decided to halt trading of Binance USD (BUSD).
In a statement published on Monday, the biggest cryptocurrency exchange in the United States revealed that it would halt trading for the BUSD stablecoin beginning on March 13. According to an additional tweet from the site, the suspension affects not just Coinbase.com but also Coinbase Pro, Coinbase Exchange, and Coinbase Prime.
“We do frequent checks on the assets listed on our exchange to verify that they are up to par with our listing requirements. On March 13, 2023, at or around 12pm Eastern Time, Coinbase will stop allowing customers to trade Binance USD (BUSD). This decision was based on our most recent evaluations.”
This decision was made less than two weeks after the New York Department of Financial Services (DFS) ordered Paxos, a cryptocurrency company that issues Binance’s stablecoin Binance USD (BUSD), to stop minting BUSD tokens. The move comes as a result of the New York Department of Financial Services’ (DFS) decision. The Department of Financial Services (DFS) said in a consumer advisory that it issued the order “as a consequence of multiple outstanding problems connected to Paxos’ management of its connection with Binance.”
After afterwards, it came to light that the SEC intends to file a lawsuit against the corporation because of its issue of BUSD. The agency stated that BUSD should be treated as an unregistered securities notwithstanding its lack of registration.
As a result of the regulatory crackdown, Paxos made the announcement that it will “terminate its connection with Binance” and that it would cease releasing new BUSD coins as of February 21. Nonetheless, the organization will maintain support for the tokens and continue to redeem them until at least February 2024.
Paxos CEO Charles Cascarilla disclosed last week, as was reported, that the company is in talks with the SEC over its decision to consider the BUSD stablecoin a security, and he added that they will continue the conversation in private. This news came after the SEC announced that it would consider the BUSD stablecoin a security.
According to the report, Cascarilla stated that the company is willing to defend its position that BUSD is not a security through litigation and that it is currently engaged in constructive discussions with the SEC. “We look forward to continuing that dialogue in private,” Cascarilla was quoted as saying.
Binance Is Considering Options Other Than Stablecoins Pegged to the USD
Binance has indicated that it is also exploring beyond Paxos and dollar-based stablecoins in the midst of an increase in regulatory scrutiny in the United States.
Patrick Hillmann, the chief strategy officer for Binance, stated in an interview that conducted the previous week that multiple public and private entities have expressed interest in collaborating with the exchange on the launch of another stablecoin, one that may not be dollar-based. Hillmann made this statement in reference to comments made by Hillmann.
In an interview with Forbes, Hillmann said that there are “quite exciting chances,” notably in Europe and the Middle East; however, he did not provide any more specifics.
Before then, Binance’s Chief Executive Officer Changpeng Zhao had also suggested that the exchange could issue a stablecoin that was not pegged to the dollar. CZ said in a message on Twitter that the business is investigating alternative issuers as well as stablecoins that are not dependent on the USD.
Binance has been having an increasingly tough time in the United States on a number of different fronts recently, in addition to the drama surrounding their stablecoin. The banking partner of the exchange, Signature Bank, increased the transaction minimums for dollar transfers at the beginning of the month and said that it would only conduct transactions by customers with USD bank accounts that were more than $100,000.
Earlier this month, the exchange made the announcement that it would temporarily block the ability of overseas clients to make withdrawals and deposits in United States dollars.
Compiled by Coinbold