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Binance's BUSD Stablecoin Issuance Halted by New York Regulator

New York's Department of Financial Services (NYDFS) has reportedly ordered Paxos to halt the issuance of Binance USD (BUSD) stablecoin. The news came from various media outlets, but Binance CEO Changpeng Zhao (CZ) suggests it could be FUD (Fear, Uncertainty, and Doubt).

BUSD logo
BUSD logo

BUSD, with a market cap of over $16 billion, is the seventh-largest cryptocurrency. The US continues to crack down on cryptocurrency participants, and Binance and Paxos are in the regulatory crosshairs now.

SEC Issues Wells Notice to Paxos

The Wall Street Journal reported that the SEC had issued a Wells notice to Paxos warning of possible legal actions. The notice claims that Paxos is selling unregistered securities when issuing BUSD. Binance admitted that the NYDFS had ordered Paxos Trust Co to cease issuing the stablecoin, according to recent coverage from the Wall Street Journal.

SEC building
SEC building

CZ's Comment on BUSD Issuance Halt

While some media outlets claimed Binance sent a statement about the BUSD issuance halt, CZ had a different take on Twitter. He referred to an old post and emphasized that people should be aware of previous FUD created by some media outlets and ignore new such cases.

BUSD Fully Issued and Custodied by Paxos

It's important to note that BUSD is fully issued and custodied by Paxos. CZ stated that all funds are SAFU (Secure Asset Fund for Users) on both Binance and Paxos. He added that Paxos would continue to service the stablecoin and manage redemptions.