The financial regulator of New York State announced on Monday that it has ordered the firm Paxos to stop issuing BUSD, the stable cryptocurrency of Binance, the largest platform in the sector in the world.
According to the New York Department of Financial Services, the company – which reports to it – has “unresolved issues” regarding its relationship with Binance, for whom it operates this product.
Paxos, in a statement, confirmed that from February 21, it will stop producing new tokens of this stablecoin, which is fully backed by US dollar-denominated reserves and separated from other digital assets.
The New York-based company will continue to support and redeem this cryptocurrency until at least February 2024 in the meantime.
Meanwhile, Binance CEO Changpeng Zhao said in a series of tweets that he had received assurances from Paxos that all funds were safe and fully backed by bank reserves, which have been audited multiple times. .
As he explained, Binance will continue to support BUSD in the future, although he expects users to “gradually migrate to other stablecoins.”
The value of this type of digital asset is usually tied directly to the dollar or another traditional asset and is an instrument that has grown in popularity in recent years.
BUSD is considered the third largest such cryptocurrency, after Tether and USD Coin, with approximately $16,000 million in circulation.
This Monday, after the news broke, its price fell against some of its rivals like Tether, a sign that a number of users were converting their wallets to these other assets.
Binance, which is the largest cryptocurrency platform in the world, was founded in China in 2017 and later moved its headquarters to the Cayman Islands shortly before the government in Beijing regulated this market.