Paxos burns $700 million worth of BUSD, Binance assures users

abdelaziz Fathi

Paxos has completed the burn of over $700 million worth of Binance-branded stablecoin BUSD, the world’s third largest stablecoin, as part of its compliance with the regulators’ orders.

Binance USD

Data from blockchain intelligence firm Nansen shows that a wallet belonging to the crypto exchange and stablecoin issuer transferred $703 million worth of BUSD tokens to a burn address. The token burn, the process of permanently removing coins from their circulating supply, was made in nine transactions within 27 hours starting Monday morning.

Over 700 million BUSD, or four of its total supply, was intended to be deleted from circulation through the burning process, which eventually keeps only $14.59 billion worth of BUSD in circulation.

Binance, the world’s largest cryptocurrency exchange by trading volumes, launched its native stablecoin back in 2019. BUSD was built in association with US-based Paxos, which serves as its issuer as well as custodian of fiat reserves. Since then, the $16 billion stablecoin has been up for direct purchase and redemption on the Paxos platform, as well as for trading on Binance.com.

The development comes shortly after the New York Department of Financial Services (NYDFS) ordered Paxos Trust Co., which has its own stablecoin, Pax dollar (USDP), to stop minting any new BUSDs. To assure holders, Binance said that Paxos will continue to manage redemptions of BUSDs.

The SEC also plans to sue Paxos for violating investor protection rules. The issuer was already told of the planned enforcement action as the regulator claims that Binance USD is an unregistered security.

Pasox has refuted the SEC’s claims and noted that it” categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws.” The company added that the SEC Wells notice pertains only to BUSD and there are no other allegations against its business.

“Paxos has always prioritized the safety of its customers’ assets. BUSD issued by Paxos is always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary,” it added in a corporate statement.

The full scope of the investigation is unclear. But the US regulators have been questioning crypto firms over their practices around handling clients’ digital assets. The probe has gathered pace in the wake of the collapse of Sam Bankman-Fried’s crypto empire.

Read this next

Digital Assets

French influencers face two years in jail for promoting crypto products

France’s National Assembly’s Economics Committee voted in favor of a law that bans social media influencers from touting risky financial services, including cryptocurrencies.

Interviews

Exberry’s Guy Melamed on paradigm shift with cloud-native exchanges at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Guy Melamed about Exberry’s cloud-native exchange SaaS platform certified by AWS to bring about a paradigm shift in the industry at a time of cybersecurity concerns.

Retail FX

Playtech revenue grows to €1.60 billion in 2022

Playtech plc (LSE: PTEC) reported solid financial results for the fiscal year 2022 as B2B growth and Snaitech’s record performance pushed it towards large gains in revenue and net profit.

Digital Assets

Terra founder Do Kwon arrested in Montenegro

Terra (LUNA) co-founder Do Kwon, the South Korean entrepreneur facing charges over the $40 billion wipeout of the stablecoins he created, was reportedly arrested in the region of Podgorica, Montenegro.

Metaverse Gaming NFT

Orbs Ecosystem Developers Launch TON Access To The Public

The TON Access service provides reliable and decentralized RPC nodes to decentralized applications (dApps).

Digital Assets

Bybit celebrates listing of Arbitrum (ARB) token with $400K prize pool

“At Bybit, we recognize our responsibility to provide forward-thinking opportunities for our users and lead the way in supporting the proliferation of cryptocurrency and blockchain technology.”

Digital Assets

StormGain launches StormGain DEX, a non-custodial alternative to its centralized exchange

StormGain DEX becomes accessible once a user connects their own non-custodial wallet and trades directly, with all orders settled on-chain.

Retail FX

OANDA launches CFDs on UK and US stocks for retail clients in emerging markets

“Interest in CFDs has been surging globally as they offer traders and investors the opportunity to profit from price changes without owning the underlying assets. CFDs give exposure to markets that are trending downward as well as upward, allowing traders to take positions even when volatility is high.”

Institutional FX

Bitpanda’s stocks, commodities, crypto now available to banks partnered with Visa

“We are excited to welcome Bitpanda to Visa’s Fintech Partner Connect Program. The partnership will assist banks to integrate an asset trading platform for crypto and other assets within their banking app.”

<