Cryptocurrency exchange Coinbase announced it will suspend trading and delist the Paxos-managed stablecoin asset BUSD. The decision follows Paxos’ revelation that the New York State Department of Financial Services directed the firm to stop issuing the U.S. dollar-pegged token BUSD.
Coinbase to Suspend BUSD Stablecoin on March 13
On Feb. 27, 2023, Coinbase announced that it will suspend trading of binance usd (BUSD) following a recent regulatory crackdown on the stablecoin by the New York State Department of Financial Services (NYDFS) on February 13. Reports indicated that the U.S. Securities and Exchange Commission (SEC) sent Paxos a Wells Notice regarding BUSD on that day. Paxos confirmed in a press release that the NYDFS directed the regulated firm to stop issuing the stablecoin.
“We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent reviews, Coinbase will suspend trading for [binance usd] (BUSD) on March 13, 2023, on or around 12pm ET,” the company said in a tweet published on Monday. “Trading will be suspended on Coinbase.com (Simple and Advanced Trade), Coinbase Pro, Coinbase Exchange, and Coinbase Prime.”
Several crypto supporters commented on Coinbase’s suspension of BUSD. “Will you suspend USDC when Gary comes for that too?” one person asked in the thread. Others criticized Coinbase’s timing of the stablecoin suspension. “So at what point did BUSD suddenly fail to meet your listing standards, and which standard specifically did it fail to meet?” another person wrote in response to the Coinbase tweet. According to the stablecoin’s token contract at press time, statistics show that 177,125 unique wallets hold BUSD.
Currently, BUSD is the 11th largest cryptocurrency by valuation after being removed from the top ten crypto assets by market capitalization. Prior to Paxos’ announcement on February 13, there were 16.1 billion BUSD in circulation. As of February 27, there are 10.73 billion BUSD in circulation after 5.37 billion BUSD were removed from the number of tokens. Binance’s reserve portfolio indicates that the exchange holds 8.64 billion BUSD, which represents 80.52% of the entire circulating supply.
What impact do you think Coinbase’s suspension of BUSD will have? Share your thoughts about this subject in the comments section below.