Binance continues to wind down BUSD by ending borrowing and staking support for the stablecoin
The exchange announced Oct. 3 that it would cease borrowing and staking support for the stablecoin by Oct. 25.
Global crypto exchange Binance announced on Oct. 3 that it will end support for Binance USD (BUSD) borrowing and staking positions by Oct. 25, 2023. This closure appears to be part of a wider plan to phase out the troubled stablecoin, as regulatory scrutiny intensifies.
Binance has urged its users to convert their BUSD holdings to First Digital USD (FDUSD) as part of the gradual phasing out of support for the stablecoin. The exchange reassured its users that BUSD would remain backed 1:1 by USD until its support ends in February 2024.
Regulatory pressure has been a significant factor in Binance’s decision to phase out BUSD. Earlier this year, Paxos, the issuer of BUSD, announced it would halt the issuance of the stablecoin following scrutiny from U.S. regulators. The Securities and Exchange Commission also filed suit against Binance this summer for several alleged violations of U.S. securities law.
Since then BUSD’s circulating supply has dropped precipitously, from a peak of more than $20 billion to approximately $3 billion.
The exchange also removed BUSD from its Secure Asset Fund for Users (SAFU), claiming th removal was a strategic move to safeguard users, given the decreasing market cap of BUSD.
Under pressure
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Binance and CEO Changpeng Zhao for several alleged violations of federal securities laws.
The SEC’s filing accuses Binance of profiting in billions by courting U.S. investors to buy, sell, and trade on its unregistered platform. The lawsuit also implicates BAM Trading Services Inc and BAM Management, who Binance partnered with in 2019 to launch Binance U.S.
In response to the SEC’s assertions that BNB and BUSD are securities. Binance has argued that BNB is a native token designed to create an internal economy and does not represent an investment contract, therefore holding that it is not a security.
Mentioned in this article
Jacob Oliver
Former Editor at CryptoSlateJacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
News Desk
Editor at CryptoSlateCryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI.
Latest Press Releases
Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
In this article
BUSD is a stablecoin issued by Paxos in partnership with Binance..
Binance
Exchange Company in Asia, EuropeBinance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Binance.US
Exchange Company in North AmericaBinance.US will provide secure and reliable cryptocurrency trading to users in the United States.
Changpeng Zhao, popularly known as “CZ,” is a notable figure in the cryptocurrency world, primarily for founding and leading Binance, the world’s leading cryptocurrency exchange by trading volume.