Coinbase Suspends BUSD Trading Amid Regulatory Crackdown
• Coinbase announced it will suspend trading and delist the Paxos-managed stablecoin asset BUSD.
• The decision follows Paxos‘ revelation that the New York State Department of Financial Services directed the firm to stop issuing the U.S. dollar-pegged token BUSD.
• Reports indicated that the U.S. Securities and Exchange Commission (SEC) sent Paxos a Wells Notice regarding BUSD on that day.
Coinbase to Suspend Trading of BUSD
Cryptocurrency exchange Coinbase announced it will suspend trading and delist the Paxos-managed stablecoin asset BUSD, following a regulatory crackdown by the New York State Department of Financial Services (NYDFS). Reports also indicated that the U.S. Securities and Exchange Commission (SEC) sent Paxos a Wells Notice regarding BUSD on February 13th, 2021.
Impact on Cryptocurrency Market
Currently, BUSD is ranked 11th in cryptocurrency valuation after being removed from the top ten crypto assets by market capitalization due to this decision. Prior to Paxos‘ announcement on February 13th, there were 16.1 billion in circulation; as of February 27th, 10.73 billion remain in circulation after 5.37 billion have been removed from circulation since then according to its token contract at press time statistics show 177,125 unique wallets hold BUSD currently .Binance’s reserve portfolio indicates 8.64 billion held which represents 80% of circulating supply .
Coinbase Listing Standards
Coinbase stated that “We regularly monitor the assets on our exchange to ensure they meet our listing standards.“ Based on their most recent reviews, Coinbase will suspend trading for binance usd (BUSD) at or around 12pm ET on March 13th ,2023 . This suspension applies across all platforms including Coinbase Pro, Coinbase Exchange ,and Coinbase Prime .
Crypto Supporters Reactions
Several crypto supporters commented on Coinbases suspension of BUSD with one person questioning if USDC would be suspended too when Gary comes for that too? Others criticized Coinbases timing of this decision asking at what point did BUSD suddenly fail meeting listing standards? Which standard specifically did it fail to meet?
Conclusion
In conclusion ,following an NYDFS directive towards regulated firm Paxos stopping its issuing of USD pegged token ,Coinbase has decided to suspend trading and delisting as well as applying across all its platforms . Crypto supporters had mixed reactions with some criticizing its timing while others are worried about potential implications for other similar tokens such as USDC .