• BUSD stablecoin has suffered from setbacks following the US SEC’s recent enforcement action on its issuer, Paxos. This has caused a plunge in trading volume and market capitalization, which recently fell below $10 billion from its all-time high of $23.49 billion.
• Binance is also facing regulatory issues due to potential non-compliance with investor protection laws and anti-money laundering regulations.
• In response, Paxos received an order to stop minting and issuing the stablecoin from the New York Department of Financial Services in February, resulting in an investor run as people rushed to withdraw their holdings.
BUSD Stablecoin Suffers Setbacks
The BUSD stablecoin experienced some major setbacks after the US Securities and Exchange Commission (SEC) took action against its issuer, Paxos. This resulted in a significant drop in trading volume and market capitalization; the latter falling below $10 billion from its all-time high of $23.49 billion on November 15th 2022.
Binance Under Investigation
At the same time, Binance has been under investigation by US regulators for possible violations of investor protection laws, anti-money laundering rules, and other regulatory non-compliance issues. Chief Strategy Officer Patrick Hillmann stated that Binance was working with authorities to resolve these issues but hinted at hefty fines being put into effect without specifying any numbers or figures.
Paxos Receives Regulatory Order
In response to this situation, Paxos – a firm regulated by NYDFS – received an order to cease minting and issuing the stablecoins on February 13th 2023. This led many investors to withdraw their holdings out of fear that their funds were not secure or safe anymore.
Market Cap Plummets
As a result of these events, BUSD’s market cap plummeted significantly; going from above $20 billion down below $10 billion as of March 3rd 2023 according to recent data reports. Despite this downturn however, it still managed to maintain its position as the third largest stablecoin by market capitalization despite all that has happened so far.
Overall it appears that BUSD’s fate is uncertain at this point due to ongoing investigations by US authorities into both Paxos’s operations as well as those of Binance itself; resulting in potentially severe consequences for both parties involved if found guilty of any charges brought against them either individually or collectively.. Withdrawals have already begun taking place among investors out of fear for their funds’ safety which could further hurt both entities if more customers follow suit until these matters are resolved between them and regulators eventually come to an agreement about what should be done going forward regarding this particular incident