In the crypto world, a third stablecoin giant is struggling under regulatory pressure. In this environment, Tron inventor Justin Sun sent 300 million BUSD from Binance to Paxos during the day.
Tron inventor withdraws BUSD from Binance!
As you follow on Kriptokoin.com, the New York Department of Financial Services (NYDFS) ordered Paxos to stop issuing Binance USD (BUSD) on February 13. This triggered a FUD and led investors to move away from BUSD. Today, these include Tron founder Justin Sun. The Tron founder transferred 300 million BUSD tokens from his Binance account to Paxos to withdraw nominally. This adds to the cases where dozens of whales abandon BUSD every day, like Justin Sun. On-chain tracker WuBlockchain shared the following announcement on the subject:
The address tagged Justin Sun withdrew $300 million in BUSD from Binance and sent it to Paxos to be burned (in exchange for cash or USDP).
The address labeled Justin Sun just withdrew $300 million in BUSD from Binance and sent it to Paxos for burning (in exchange for cash or USDP). According to @ScopeProtocol. https://t.co/u6mAamwNij
— Wu Blockchain (@WuBlockchain) February 15, 2023
According to some commentators, this will eventually cause BUSD to be delisted by exchanges including Binance. So such developments this is actually not good for decentralization. While many observers say they will create another stablecoin instead, most bearers are observing that they are converting their BUSD to USDT. For this reason, it is considered that such actions may lead to negative consequences for the market.
Some commentators think that the world’s largest cryptocurrency exchange Binance will create another stablecoin instead of using USDT. Otherwise, they state that if Tether also faces legal action, it may cause great panic in the market.
SEC lawsuit against Paxos surprises crypto community
The fact that stablecoin Binance USD (BUSD), issued by the Paxos Trust Company, is in the eyes of US regulators has sparked a variety of reactions from the crypto community. On February 13, the US Securities and Exchange Commission (SEC) filed a lawsuit against Paxos, claiming that BUSD is a unregistered security. issued a notice of litigation. On the same day, the New York Department of Financial Services (NYDFS) ordered Paxos to cease issuing BUSD.
As Paxos faces regulatory scrutiny on several fronts, various members of the crypto community have taken to Twitter to address the situation. Members of the crypto community have put forward various theories on claims that BUSD is an unregistered security, from ignoring the issue as ‘FUD’ to calling it an attack on the Binance exchange. Crypto analyst Miles Deutscher expressed his thoughts in a tweet, arguing that no one expects profit when buying stablecoins:
The SEC has labeled BUSD an ‘unregistered security’ and is suing its issuer, Paxos. But how can a stablecoin be considered a security if it doesn’t explicitly meet the Howey Test criteria? No one had a ‘profit expectation’ when buying BUSD.
The SEC has labelled BUSD as an “unregistered security”, and is suing its issuer, Paxos.
But how on earth is a STABLECOIN considered a security, when it clearly doesn’t meet the Howey Test criteria.
No one has ever had “the expectation of profit” when buying $BUSD. pic.twitter.com/QXOlDUyvc3
— Miles Deutscher (@milesdeutscher) February 13, 2023
Similarly, trader nicknamed Tree of Alpha was stunned by the new development. The community member questioned how it was considered a security and asked his followers if they were buying BUSD with the expectation that it would go up to $2. The trader also addressed the SEC chairman, Gary Gensler, saying the government official was on an “uncontrolled crusade against crypto”.
Meanwhile, iTrader AshWSB also commented on the issue, calling it ‘FUD’. The trader argued that BUSD is fully supported and Paxos’ failure to issue more tokens will not affect existing tokens. “It’s good to be aware of the news, but don’t act emotionally,” the trader warned.
Don’t worry about the BUSD Fud
BUSD not a scam token,
it’s backed by USD 1:1Paxos not issuing any more BUSD
will not effect the existing BUSDIt’s good to stay informed but don’t
make emotional moves.— Ash WSB (@Ashcryptoreal) February 13, 2023
Analyst Tedtalksmacro also reiterated the sentiments that BUSD may not meet the criteria for securities. The analyst suggested that the event could simply be ‘a chance at Binance’.
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