Coinbase exchange decided to suspend support for the Binance stablecoin (BUSD), as a backend company facing regulatory heat in the USA.
Coinbase is a US-based Nasdaq-listed crypto exchange. In the US, this exchange is top-ranked & also known for its high compliance nature. This exchange was founded in 2012 by Brian Armstrong and Fred Ehrsam.
On 27 Feb 2023, the Coinbase team announced that the company decided to suspend the trading of BUSD stablecoin because BUSD is no longer meeting its listing standard.
As per the announcement, Coinbase will suspend trading support for BUSD on 13 March 2023 at noon time, on all of its crypto trade platforms but withdrawal will remain open for the crypto traders.
Legal hurdles with BUSD
On 13 Feb 2023, The United States Securities and Exchange Commission (SEC) sent a Wells notice to the BUSD issuer company Paxos over the nature of BUSD stablecoin. The SEC body claimed that BUSD was a security under the Howey test.
However, the SEC didn’t take any legal or enforcement action against Paxos but Paxos received a strict order from the NewYork financial watchdog to stop minting new BUSD stablecoins in supply.
Since last week, Paxos’ team has been in constructive talks with the SEC body over the nature of BUSD.
To this date, the whole matter is still unclear officially because Paxos is facing regulatory heat because of BUSD stablecoin, while Paxos provides USDP stablecoin service along with BUSD but USDP is free from any regulatory action.
A few reports claimed that there are some unclear & unresolved relationships between Paxos & Binance exchange and this is the reason why Paxos is facing problems.
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