Binance has announced that it will burn a large amount of altcoins after a restrictive decision from US regulators.
Binance will burn billions of tokens
The exchange reported that it will burn a large portion of the BUSD stablecoin in a new announcement later in the day. Two billion of these tokens will be burned or have already been burned. At the same time, a similar amount of ETH-based BUSD will be released; these coins are used here as collateral. Chinese crypto journalist and blogger Colin Wu added that the total number of BUSD tokens has now dropped from 16.1 billion to 12.3 billion, according to the latest data from Etherscan.
Binance announced that it will burn 2 billion Binance-Peg BUSD on BNBChain today, and the BUSD on Ethereum as collateral will be released. Etherscan shows that the total amount of BUSD has dropped from the previous 16.1b to the current 12.3b.
— Wu Blockchain (@WuBlockchain) February 22, 2023
Last week, Paxos, the company authorized to issue BUSD, got in trouble with the US Securities and Exchange Commission for not registering the Binance stablecoin as a security. So far, the SEC has flagged BUSD as an unregistered security with all the negative legal consequences that could follow.
Paxos is a regulated issuer that has been issuing BUSD for over three years since 2019. So far, New York’s NYDFS regulator has ordered Paxos to cease printing BUSD.
Paxos is in talks with the SEC
Paxos, the company authorized to issue BUSD, announced that it will not print joint BUSD after NYDFS’ stop order. According to Reuters, Paxos CEO Charles Cascarilla said the company is in “constructive talks” with the SEC regarding BUSD and they will continue the conversation privately:
We are holding constructive talks with the SEC and look forward to continuing this dialogue privately.
Cascarilla said the decision to end the partnership with Binance was made because the relationship was “no longer aligned with current strategic priorities.” He added that the communication with NYDFS and SEC about BUSD is not related to the partnership with Binance.
The Paxos CEO added that while the company is working with the SEC to publish its application for a clearing house license, it is also working with the U.S. Office of the Controller of Currency (OCC) to obtain final approval of the national trust bank statute.
Binance focuses beyond Paxos and dollar-based stablecoins during regulation
Binance chief strategy officer Patrick Hillmann said in an interview last week that many private and public entities are showing interest in collaborating with the exchange to launch another non-dollar-based stablecoin.
“There are very interesting opportunities, especially in Europe and the Middle East,” Hillmann said in an interview with Forbes, and did not elaborate further. It is worth noting that Binance CEO Changpeng Zhao has also put forward the idea of launching a non-dollar-based stablecoin for the exchange. CZ said in a Twitter post that the company is investigating other issuers and non-USD-based stablecoins.
Why not go for another issuer?
— Abdul (@0x_Abdul) February 13, 2023
As Kriptokoin.com, we have stated that BUSD has recorded the stability of the dollar in this environment.
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