Revealing over the weekend, restrictive decisions by US regulators on stablecoin BUSD sparked a wave of immigration in the market. On-chain data shows institutional players are moving away from stablecoins amid growing concerns. Here is the latest situation in the altcoin market.
On-chain data shows an institutional investor has moved from this altcoin project
Etherscan data shows that one of the major Bitcoin holding companies is constantly withdrawing USDC from Circle and transferring it to Binance. According to the whale’s last 25 transactions on Etherscan, the total output was $450 million. On Twitter, crypto analytics account Lookonchain reported that the same investor had withdrawn large amounts of BUSD from Paxos prior to the US Securities and Exchange Commission’s (SEC) final action against the company.
Twitter’s Frank Fox commented that these large withdrawals, which came at the right time, proved that institutions and funds had inside information about everything. The crypto researcher added that large investors will use individual investors “as exit liquidity whenever they get a chance.”
https://twitter.com/0xfrankfox/status/1625331710627028992
Paxos is on the radar of US regulators
On February 12, The Wall Street Journal reported that the SEC will file a lawsuit against BUSD stablecoin maker Paxos; this document is a document used to inform businesses about an upcoming enforcement action. The notice claimed that Binance USD (BUSD) is an unregistered security.
However, Binance CEO Changpeng Zhao had previously argued that Paxos is covered by the New York Department of Financial Services (NYDFS) regulation. Additionally, in a report, a Paxos spokesperson disagreed with the SEC’s belief that BUSD is a security token and stated that the firm would vigorously sue the issue if challenged. As Kriptokoin.com, we mentioned that BUSD lost its price stability in the middle of the developments. It announced on Paxos that it will stop printing BUSD from February 21.
https://twitter.com/cz_binance/status/1625067495760560128
NYDFS hit BUSD via Paxos
The US New York Department of Financial Services ordered Paxos on Sunday to cease production of Binance USD. It also appears to be preparing to take action on this as well, as the SEC has sent a Wells Notice to Paxos. Paxos says it “categorically disagrees” with the SEC and insists that BUSD is not a security.
Currently, $15.9 billion worth of BUSD is in circulation. Binance CEO Changpeng Zhao said the exchange will continue to support BUSD while reducing confidence. Paxos said that BUSD can be cashed out through the Paxos Trust by 2024.
https://twitter.com/cz_binance/status/1625067494011506691
Paxos will continue to issue its other stablecoin, the Pax Dollar (USDP). This stablecoin continues to be in circulation with a total supply of $870 million.
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