The recent investigation of the US Securities and Exchange Commission (SEC) against altcoin Binance USD (BUSD) issuer Paxos has triggered the crypto industry. However, Binance CEO Changpeng Zhao (CZ) came forward with various statements. Here are the details…
Binance says “funds are safe”
Speaking to Twitter, CZ emphasized that BUSD is issued and redeemed by Paxos and the funds are safe. He noted that the issuer of BUSD was directed by the New York Department of Financial Services (NYDFS) to stop issuing new Binance USD. As we reported on cryptocoin.com, the New York Department of Financial Services (NYDFS) has established Paxos Trust Co. as one of the largest dollar-pegged cryptocurrencies. It dealt a blow to the cryptocurrency industry by directing it to halt its issuance.
https://twitter.com/cz_binance/status/1625067484368740353
Pressure is mounting on the industry as the government focuses on maintaining greater control over the industry. Paxos, which manages Binance’s BUSD token, has been ordered to stop creating any more tokens. However, they will continue to manage product refunds, according to a Binance statement. Binance CEO mentioned that BUSD is a stablecoin that is wholly owned and managed by Paxos. However, Paxos will continue to service the product and manage further refunds.
According to the conversation between CZ and Paxos, the funds are safe and fully covered by the reserves in their banks. He reported that reserves have already been audited multiple times by various firms. Binance CEO stated that he had no knowledge of the alleged SEC and Paxos lawsuit. As the case is between the US SEC and Paxos, CZ has no expertise in this matter. However, he claimed that in the future, if BUSD is recognized as a security by the courts, it will have a profound impact on the crypto industry. The judiciary will decide how the industry will develop.
Binance will continue to support the altcoin project
CZ assured that Binance will continue to support BUSD in the future. The crypto exchange predicts that users will switch to other stablecoins after this research. The exchange will make product adjustments accordingly. The news comes at a time when SEC chairman Gary Gensler announced that the regulator will focus on increasing its oversight over the staking industry. This news has caused alarm among investors who hold their funds on centralized staking platforms, which is why some decentralized finance enthusiasts are calling Gensler’s desire to control the industry for decentralized staking “bullish”.
Regulatory pressure on the cryptocurrency industry has been a growing concern for market participants. The uncertainty surrounding the industry has caused many to question the future of cryptocurrencies and we will see what other regulatory measures can be taken in the coming months. Despite the uncertainty, many are optimistic that cryptocurrencies will continue to play a vital role in the financial landscape and that recent restrictions will only strengthen the industry in the long run.
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