Paxos Ends its Relationship with Binance

Paxos Trust Company is under investigation and allegations over the issuing of $BUSD.

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The blockchain infrastructure platform Paxos Trust Company officially announced on February 13th the end of its relationship with the exchange Binance due to an ongoing investigation by the New York regulators.

The U.S. Securities and Exchange Commission (SEC) is planning on suing the stablecoin issuer Paxos, alleging that BUSD is unregistered security.

Paxos will stop the minting of new Binance USD (BUSD) stablecoins following the SEC’s intentions and in accordance with directions from the New York Department of Financial Services (NYDFS).

“Paxos remains committed to becoming the global leader in the blockchain tokenization infrastructure [...],” the firm stated. All customers can withdraw and convert their BUSD through Paxos Trust Company until at least February 2024, as all existing BUSD remain fully backed and redeemable.

BUSD has a market capitalization of $16 billion and is currently the seventh-largest cryptocurrency by market value at the time of writing. “As a result, BUSD market cap will only decrease over time,” Binance CEO Changpeng Zhao tweeted on February 13th.

Several crypto community members have spoken out about the situation to state their arguments and theories against the allegations. The crypto analyst shared his thoughts in a Tweet, saying, "No one has ever had ‘the expectation of profit’ when buying $BUSD.”

Sources: cointelegraph.com, es.cointelegraph.com, www.coindesk.com