Binance-branded stablecoin BUSD has suffered a sharp drop in active addresses due to the regulatory attack mounted by US authorities. Data from Glassnode shows the number of BUSD active addresses per hour has declined to levels not seen since last October.
Today, the third largest stablecoin by market cap is averaging about 95 active addresses hourly, representing a 60% drop from the 255 active addresses it averaged at the end of 2022. The decrease in BUSD active addresses stems from the bearish sentiments around the Binance ecosystem.
BUSD and Its Potential Lawsuits
US regulators have targeted the Binance ecosystem in recent weeks. Last month, the US Securities and Exchange Commission (SEC) demanded BUSD issuer Paxos stop minting further tokens on the grounds that the stablecoin is not a registered security.
The SEC also confirmed that it was planning to file a lawsuit against Paxos for allegedly failing to adhere to investor protection laws.
Following these developments, Paxos announced that it was looking to end its relationship with Binance in regard to BUSD. Further, Coinbase revealed it would delist the stablecoin from its platform on March 13.
The leading exchange in the United States said it conducted an internal review which indicated that BUSD was no longer meeting the standards for listing.
It is worth highlighting that Coinbase users won’t be able to trade BUSD but can withdraw their funds anytime.
Since the SEC enforcement action on Paxos, BUSD market capitalization has reduced significantly. On February 17, the total value of BUSD was $13.4 billion, and as of this writing, it stands at $8.9 billion, representing a 33% decrease, as per CoinGecko’s data.
Tether Benefits From BUSD’s Recent Troubles
Data analysis company Santiment reports that most BUSD holders have recently converted their holdings to Tether’s USDT. The market cap of USDT has grown by 3% to $71.5 billion in the past seven days. In addition, the number of USDT holders has been increasing rapidly since the start of the year.
BUSD’s troubles appear to have an impact on the wider crypto market, with many leading tokens going in the red. Bitcoin has dropped by 3.5% to $22,450, while Ethereum plunged 1.5% to $1,575 in the past seven days, data on CoinGecko shows.
