Binance to Continue Its Support to BUSD Despite SEC's Dictat

Binance SEO Assures BUSD Holders

Binance CEO Changpeng ‘CZ’ Zhao has moved to assure users that funds are safe despite the intended enforcement action. A Twitter thread on Feb. 13 noted that Paxos is regulated by the NYDFS and BUSD is ‘wholly owned and managed by Paxos.’

According to Zhao, Paxos will continue to service BUSD and manage redemptions and has also made assurances of its reserves which have been audited by multiple parties. As a result of the enforcement action, the Binance CEO said that BUSD market cap will decrease over time and the exchange will explore non-USD based stablecoins.

Zhao also said that Binance will continue to support the stablecoin on its exchange, while acknowledging that users may well migrate to other stablecoin tokens as a result of the enforcement action.

This will also see Binance consider ‘product adjustments’, with a move away from using BUSD as its main trading pair for numerous tokens available across the exchange. Binance’s CEO also cautioned that the actions taken by the SEC and NYDFS could have a significant impact on the ongoing development of the cryptocurrency ecosystem.

Zhao also noted that ongoing regulatory uncertainty in certain markets will necessitate reviews of other projects in given jurisdictions ‘to ensure our users are insulated from any undue harm.’

SEC's Tussle With Crypto Service Providers

American regulators have had a number of cryptocurrency service providers and tokens in its crosshairs in recent years. Ripple is still in an ongoing legal battle with the SEC over claims that XRP is an unregistered security.

Meanwhile, cryptocurrency exchange Kraken agreed to cease its staking services to U.S. clients in Feb. 2023, paying $30 million in disgorgement, prejudgment interest, and civil penalties to the SEC. The regulator charged Kraken with failing to register its crypto asset staking-as-a-service program.