Coinbase has finally executed the suspension of the Binance USD (BUSD) that it had previously announced.
According to the officials, trading for the BUSD has been suspended as they had previously communicated.
BUSD Trading has been Suspended
The teams at Coinbase have made the final announcement pertaining to the suspension of Binance USD. In the latest announcement, the exchange has confirmed that they have fully suspended BUSD.
They have decommissioned all the trading options involving the stablecoin. No user will be able to utilize or access the trading options for BUSD on any of their platforms.
Coinbase’s Announcement about BUSD’s Suspension
The exchange officials recently tweeted that they have disabled all kinds of trading features for the troubled stablecoin.
When the announcement was made, many users were concerned about their BUSD funds in their Coinbase wallets.
They assured all the users that none of them will have any issues in regard to their BUSD funds. They will have full access to their BUSD funds as well and they will be able to withdraw them.
There is currently no plan of removing or converting the BUSD tokens into other stablecoins so the users can withdraw them whenever they like.
Initial Plans Shared by Coinbase
Initially, Coinbase had announced that they were going to suspend the stablecoin by the end of February 2023. They claimed that the stablecoin no longer met the standards and requirements of being listed on their platform.
Citing the reason, they announced that they will be removing the stablecoin issued by Paxos as the month (February) ends approaches.
They had confirmed that the suspension will be implemented on all of their trading platforms. These platforms include Coinbase Prime, Coinbase Pro, Coinbase Exchange, and Coinbase.com.
The announcement made it clear that none of the platforms they host will be offering trading services for BUSD.
The reason behind Coinbase’s Decision
The exchange was forced to make the decision after the Department of Financial Services (DFS), the financial regulator from New York went after Paxos.
The regulator issued a ban on Paxos, the company behind the minting and issuance of the stablecoin, BUSD.
The company was strictly prohibited by the regulator to no longer issue stablecoins. Thus, it is no longer of any use to most of the cryptocurrency exchanges and in near future, for investors.
Statement by the DFS
According to the regulatory authority, the order was issued against Paxos following the issues that were raised pertaining to the company’s operations.
Despite raising several issues and concerns about the company, none of the issues were resolved. This led to the company deciding to ban the company from issuing any more stablecoins.
US SEC to Go After Paxos
It was revealed after the ban that the US Securities and Exchange Commission (SEC) is planning to go after Paxos.
The securities regulator is expected to issue a Wells Notice to the BUSD issuing company. The sources have confirmed that the regulator is planning to go after Paxos in court over its issuance of BUSD.
According to the regulatory authority, BUSD was an unregistered security that must not have been offered to the locals in the United States.
Paxos Ended its Relationship with Binance
As the reports emerged about the US SEC going after Paxos, it was a sensible decision for the company to lower the damage.
It made a strategic decision of cutting its dies with the largest exchange, Binance. BUSD has been serving as the stablecoin that is offered through the Binance ecosystem.
As the company announced cutting its ties with Binance, it announced the discontinuation of mining of BUSD for the exchange from February 21.
Although Paxos has announced ending its relationship with Binance, it is not going to do it until February 2024.
As of now, the market capitalization of Binance USD is $8.4 billion. Prior to the suspension, the valuation of BUSD was at a high of $16.5 billion.