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Cryptocurrency exchange Coinbase announced it will suspend trading and delist Paxos-managed stablecoin asset BUSD. The decision follows Paxos’ disclosure that the New York State Department of Financial Services instructed the firm to stop issuing the US dollar-pegged token BUSD.
On February 27, 2023, Coinbase announced that it will suspend trading of binance usd (BUSD) following a recent regulatory attack on the stablecoin by the New York State Department of Financial Services (NYDFS) on February 13. Reports indicated that the US Securities and Exchange Commission (SEC) sent Paxos a Wells notice regarding BUSD that day. Paxos confirmed in a press release that the NYDFS instructed the regulated firm to stop issuing stablecoins.
“We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our latest reviews, Coinbase will suspend trading for [binance usd] (BUSD) on March 13, 2023, at or around 12:00 PM ET,” the company said in a chirping published on Monday. “Trading will be suspended on Coinbase.com (simple and advanced trading), Coinbase Pro, Coinbase Exchange and Coinbase Prime.”
Several crypto followers commented on Coinbase’s suspension of BUSD. “Will you suspend the USDC when Gary comes for it too?” a person asked in the thread. Others criticized Coinbase’s timing of the stablecoin suspension. “So at what point did BUSD suddenly fail to meet your listing standards, and what standard did it fail to meet?” another person wrote in response to Coinbase tweet. According to stablecoin’s token contract at press time, statistics show that 177,125 unique wallets hold BUSD.
Currently, BUSD is the 11th largest cryptocurrency by valuation after being removed from the top ten crypto assets by market capitalization. Prior to Paxos’ announcement on February 13, there was BUSD 16.1 billion in circulation. As of February 27, there is 10.73 billion BUSD in circulation after 5.37 billion BUSD was removed from the number of tokens. Binance’s reserve portfolio indicates that the exchange has 8.64 billion BUSD, representing 80.52% of the entire circulating supply.
What impact do you think Coinbase’s suspension of BUSD will have? Share your thoughts on this topic in the comments section below.
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