US authorities impose a ban on the issuance of Binance USD cryptocurrency

The New York State Department of Financial Services (NYDFS) has restricted the issuance of the largest stablecoin, Binance USD. The regulator is forcing the Paxos Trust project to suspend the issuance of new BUSD tokens. At the same time, the company will continue to manage stablecoin redemptions.

The Binance-branded crypto coin is pegged to the US dollar. Paxos and Binance released it in 2019 with NYDFS approval.

“We are proud that our stablecoin allows trusted companies like Binance to offer products tailored to their users,” Binance noted in 2019.

And recently, the NYDFS began investigating Paxos. Representatives of the structure did not comment on the reasons for the proceedings. In addition, the SEC drew attention to Paxos.

It is reported that the US Securities and Exchange Commission intends to sue the issuer of BUSD, arguing that the stablecoin is an unregistered security.

CEO of Binance Changpeng Zhao is confident that the recognition of the largest stablecoin as a security will seriously affect the entire industry due to the fact that other countries are guided by the United States.

“Binance will continue to support BUSD for the foreseeable future but understands that over time, users will move to alternatives. That is why the company will make changes to the products. For example, it will refuse to use BUSD as the main pair for trading,” Zhao said, stressing that the supply of BUSD will decrease over time.

According to CoinGecko, the market capitalization of BUSD reached $1.6 billion. The token is in 7th place among all digital currencies, as well as in the top 3 among stablecoins after USDT and USDC.

What do you think the BUSD sanctions mean for the crypto market?