Binance CEO: BUSD is wholly owned and managed by Paxos

Changpeng Zhao believes that after the ban on the issuance of BUSD, users will switch to other assets

13.02.2023 - 11:30

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2 min

What’s new? Changpeng Zhao, the head of the Binance cryptocurrency exchange, commented on the decision to ban the issuance of new Binance USD (BUSD) stablecoins by Paxos, made by the New York Department of Financial Services (NYDFS). Zhao said the asset is wholly owned and managed by Paxos, and the company will continue to service all operations with it. In turn, Binance will also support BUSD for the foreseeable future.

#BUSD. A thread. 1/8In summary, BUSD is issued and redeemed by Paxos. And funds are #SAFU! — CZ 🔶 Binance (@cz_binance) February" class="redactor-linkify-object">https://twitter.com/cz_binance/status/162506748436... 13, 2023

The BUSD stablecoin issued by Paxos under the Binance crypto exchange brand is the third largest in the crypto market after USDT and USDC and ranks seventh in the overall cryptocurrency ranking with a capitalization of $16,16 billion.

What else did Zhao say? Binance has been informed of the NYDFS ban on the issuance of new stablecoins. The exchange will continue to support the asset, but its market capitalization will decrease and users will move to other stablecoins. According to Zhao, user funds remain safe and are fully covered by reserves. Paxos will be responsible for servicing BUSD and managing redemptions.

Zhao also commented on the US Securities and Exchange Commission (SEC) investigation into BUSD. The regulator believes that the asset is an unregistered security and intends to hold Paxos liable for its issuance and violation of investor protection laws. Binance’s CEO noted that he did not know the details of the case except for the information published in the media. In his opinion, recognizing BUSD as a security “will have profound impacts on how the crypto industry will develop (or not develop).”

CoinDesk wrote about the NYDFS investigation into Paxos last week. Earlier, analyst Colin Wu reported that the US Treasury Department urged Paxos to withdraw its application for a banking license, but the company denied those rumors.

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