Binance USD (BUSD) Peg Shatters as Value Falls Below $1 After SEC Accuses Paxos of Unregistered Securities
Today, Binance USD (BUSD), the stablecoin issued by Paxos, saw its value drop rapidly as it fell off its peg of $1. This comes after reports emerged that the SEC is taking action against Paxos for claiming that BUSD is an unregistered security.
SEC Plans to Sue #Paxos for Unregistered Binance USD $BUSD Security Violation @azcoinnews https://t.co/PzfzzN8KpX
— AZCoin News (@azcoinnews) February 13, 2023
After the news broke, the value of BUSD quickly declined, hitting a low of $0.9996 before bouncing back to $0.9999. Despite this temporary dip, the market value of BUSD remains high at $160 million, and its price has quickly returned to $1. Trading volumes have also increased as a result of the news.
Binance USD, a Binance-branded stablecoin pegged to the dollar, was launched in 2019 in partnership with Paxos. The Paxos-run digital asset exchange, itBit, also lists BUSD. The notice couldn’t be determined if it was related to the issuance or listing of the coin.
“Paxos is not commenting on any individual matter,” said a Paxos company spokeswoman. Binance said BUSD is issued and owned by Paxos, and it only licenses its brand.
Follow us on Telegram: https://t.me/azcoinnews
The SEC’s lawsuit against Paxos raises concerns about the future of stablecoins and the regulatory landscape for digital assets. It highlights the need for clear guidelines and standards in the industry, as well as the importance of transparency and accountability in the issuance of stablecoins.
While the exact details of the lawsuit are not yet known, it is clear that the SEC is taking a closer look at stablecoins and their compliance with existing securities laws. This is an important development for the industry, as it could have significant implications for the future of stablecoins and the regulation of digital assets more broadly.
In the meantime, BUSD continues to trade and be used as a medium of exchange, showing that even with regulatory challenges, stablecoins remain a key player in the digital asset ecosystem. It will be interesting to see how this lawsuit progresses and what impact it will have on the future of stablecoins and digital assets.
Read more:
- Binance Is Moving To Prioritize BUSD, Over Several Others On Its Cryptocurrency Exchange
- Binance Is Launching The Binance Account Bound (BAB), 1st Soulbound Token On BNB Chain
- Paxos, Issuer Of USDP And Binance USD (BUSD) Stablecoins, Under Investigation By NYDFS