Binance, the cryptocurrency trading platform, recently announced that it has decided to withdraw support for the BUSD stablecoin on its platform gradually. The exchange will remove BUSD from its spot and margin trading pairs once the process is complete.
Gradual Withdrawal For BUSD Support
According to Binance, the new development comes following Paxo’s halt in minting new BUSD tokens. As a result, the exchange revealed that it will gradually discontinue support for BUSD products.
However, Binance quickly added that it will continue backing BUSD by up to 1:1 to USD. In its latest announcement, Binance urged users to convert their BUSD tokens on or before February 2024.
Binance has outlined a series of actions related to delisting BUSD from its platform. The exchange will officially delist BUSD as a loanable asset on September 6, marking a significant step in gradually phasing out support for this stablecoin.
Furthermore, beginning on September 7, Binance will suspend withdrawals of Binance-pegged BUSD tokens from blockchains such as Avalanche, BNB Chain, Polygon, and Tron. This action demonstrates a comprehensive approach to winding down BUSD support across multiple ecosystems and reinforcing Binance’s commitment to the decision to remove BUSD from trading pairs.
Caught In A Regulator’s Crossfire
Earlier this year, the New York Department of Financial Services (NYDFS) ordered Paxos, the entity responsible for issuing BUSD, to halt its operations. This regulatory clash highlights the complex and ever-changing regulatory landscape surrounding stablecoins and the cryptocurrency industry as a whole.
Furthermore, the NYDFS directive highlighted the difficulties that stablecoins like BUSD can pose regarding regulatory compliance. Regulatory bodies worldwide are still figuring out how to effectively oversee and manage these digital assets, often leading to conflicts between crypto projects and financial watchdogs.
Meanwhile, Binance has had its fair share of legal issues with US regulators, including the Commodity and Futures Trading Commission (CFTC). The CFTC alleged that Binance had offered unregistered crypto derivatives products, thus violating federal regulations.
This week, there have been indications of a twist in the legal battle between the US top regulator and the exchange. According to Reports, the US Securities and Exchange Commission (SEC) has filed a sealed motion concerning its ongoing lawsuit against Binance.
This motion will allow the regulator to submit private or confidential information without publicizing it. As the world’s leading crypto trading platform, Binance continues to face regulatory challenges from several jurisdictions.
From the United Kingdom to France, Singapore, and Nigeria, the exchange has faced regulatory scrutiny over its alleged role in facilitating illicit financial transactions and aiding money laundering. However, Binance has repeatedly stressed that it is committed to adhering to regulatory guidelines in any region of its operations.
Meanwhile, the crypto community expects the exchange to move against the SEC’s recent filing to conceal information from the public.
