New York Regulators Crack Down on Crypto: Binance’s BUSD Token Creation Halted
The cryptocurrency world is once again facing regulatory pressure, as the New York Department of Financial Services (NYDFS) has ordered Paxos Trust Co. to stop creating more of its Binance’s dollar-pegged cryptocurrency, BUSD.
Paxos Trust Co. is a leading player in the cryptocurrency market and is responsible for issuing and listing Binance’s BUSD token. However, the NYDFS has now directed the company to stop creating any further tokens of this cryptocurrency. Despite this, Paxos will still be able to manage redemptions of the product, according to a statement from Binance.
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This move by the NYDFS is a part of the wider clampdown on the cryptocurrency sector by the government. Regulators are concerned about the potential risks that cryptocurrencies pose to consumers and the financial system. The NYDFS is one of the most influential regulators in the world, and its decision will have a significant impact on the future of cryptocurrencies.
Binance, one of the world’s largest crypto exchanges, has stated that the NYDFS has only asked Paxos to stop creating more BUSD tokens and that Paxos will still be able to manage redemptions of the product.
🚨The news report that #Paxos will stop issuing new $BUSD
On-chain data shows that the last mint tx of #BUSD ($209M) is at 2023/02/03 21:44 UTC, no new $BUSD is minted, and about $123.32M burned after that.
Track it in moneyflow:https://t.co/MM5GBVh9Xshttps://t.co/LHHi9IuV1M pic.twitter.com/mzOIUeKyCk
— 0xScope (🪬 . 🪬) (@ScopeProtocol) February 13, 2023
On-chain data from Watcher.pro shows that the last mint transaction of BUSD was on February 3, 2023, and since then, no new BUSD tokens have been minted.
This latest move by the NYDFS shows the growing concerns among regulators about the potential risks posed by cryptocurrencies. As the cryptocurrency market continues to grow and evolve, regulators will continue to monitor the sector and ensure that consumers are protected. The impact of this decision on Paxos and Binance remains to be seen, but it is clear that the regulatory landscape of cryptocurrencies will continue to be a topic of discussion in the months to come.
As AZCoin News reported, the US Securities and Exchange Commission (SEC) is preparing to take legal action against Paxos Trust Co. The enforcement staff of the SEC has issued a Wells notice to the firm, which serves as a notification of a potential enforcement action.
Read more:
- Binance USD (BUSD) Peg Shatters As Value Falls Below $1 After SEC Accuses Paxos Of Unregistered Securities
- 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