![]() Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account Last week, the US Securities and Exchange Commission said overseeing crypto assets was a key priority for 2023. Then FTX, one of the world’s biggest crypto exchanges at the time, went bankrupt in November, deepening the crisis in the industry.Īs a result, digital asset companies are facing tighter regulatory scrutiny around the world. Starting last year, the digital financial assets sector has been weathering a so-called “crypto winter,” sparked by the collapse of TerraUSD, an algorithmic stablecoin, in May. “Over time, the supply will drop as redemptions happen,” he said.īut “in terms of confidence in the exchange as a whole,” Binance will likely retain users as long as customer deposits continue to be protected and users can still convert BUSD to other stablecoins, Lee added. Martin Lee, a data journalist for Nansen, told CNN that Binance had few options to counter the ban. “Stablecoins are a critical safety net for investors seeking refuge from volatile markets, and limiting their access would directly harm millions of people across the globe,” the firm said. In its statement, Binance warned that the move to stop minting BUSD would hurt users and “only decrease” the token’s market capitalization over time. Super Bowl LVI was crypto's coming out party. Workers prepare for the NFL Super Bowl LVII football game outside State Farm Stadium, Wednesday, Feb. “We’re seeing some indecision from the market trying to decide if this is a case of agencies going after one bad instance of a stablecoin, or trying to shut stablecoins down entirely.” This time, “investors are still trying to digest the news,” Thurman added. In December, a deluge of bad press caused investor jitters, sparking outflows of as much as $3 billion. He noted that Binance had seen worse days. “Clearly there’s a number of traders and investors moving to take their funds off the exchange,” Andrew Thurman, Nansen’s content lead, told CNN. Binance suffered one of its worst-ever days in terms of withdrawals on Monday, with $873 million in net outflows, according to data provider Nansen. “Binance licenses its brand to Paxos for use with BUSD, which is entirely owned by Paxos and regulated” by New York authorities, the exchange said. In a statement to CNN, Binance stressed that, although its name appeared on the coin, “BUSD is a stablecoin wholly owned and managed by Paxos.” They’re usually pegged to real-world assets such as gold or the US dollar. Stablecoins are digital currencies that are designed to hold steady. “The department is monitoring Paxos closely to verify that the company can facilitate redemptions in an orderly fashion subject to enhanced, risk-based, compliance protocols,” it said.īinance briefly halts US dollar transfersīUSD is one of the world’s most popular stablecoins, with a circulation of 15.8 billion tokens, according to CoinMarketCap. In a statement, the NYDFS told CNN the order was “a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance.” It did not give detail on why the regulator had ordered it to stop issuing BUSD. Paxos also said it would “end its relationship” with Binance, the world’s largest crypto exchange. Paxos has told customers they will be able to redeem their BUSD through February 2024, with options to redeem funds in US dollars or to convert their tokens to Pax Dollar, another stablecoin issued by the company. The ones already circulating “have and always will be” backed one-to-one with US dollar reserves, it added. The firm said in a statement that it would stop issuing the token on February 21. Paxos, a blockchain company, announced Monday that it had been instructed by the New York State Department of Financial Services (NYDFS) to stop issuing BUSD, a Binance-branded stablecoin pegged to the US dollar. ![]() New York’s top financial regulator has ordered a crypto company to stop minting a major stablecoin, widening a clampdown on the embattled digital assets sector.
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