- Coinbase announced via Twitter its decision to suspend trading of Binance USD (BUSD) effective March 13, 2023.
- The decision will apply to Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime.
- The United States Securities and Exchange Commission (SEC) ordered the issuers of BUSD, Paxos, to stop issuing said stablecoin as they consider it to be a security.
This Monday, February 27 coinbase, the largest crypto exchange in the United States, announced via Twitter its decision to suspend trading of Binance USD (BUSD) effective March 13, 2023. It is so BUSD will be delisted from Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime.
According to the company, Users’ BUSD funds will remain accessible for withdrawal from the platform at any time.
In early February the United States Securities and Exchange Commission (SEC) ordered Paxos, the company that was in charge of issuing and managing BUSD, stop issuing said stablecoin. According to the notice, the registry alleges that BUSD is a security and therefore Paxos had to register the cryptocurrency under federal securities laws.
Consequently, since February 21, no new BUSD has been issued to the market and, according to data from CryptoSlatethe supply of the token has decreased by 18.2% over the past seven days.
BUSD does not meet Coinbase standards
The crypto exchange reported on Twitter that Binance USD does not comply with “your listing standards” and have therefore decided to remove the stablecoin from their platform.
A company spokesperson explained to Cointelegraph that heThe decision comes from its “own internal monitoring and review processes” and BUSD does not meet the standards so its trading should be suspended.
Timothy Cradle, Director of Regulatory Affairs for the Blockchain Intelligence Group, explained in a post that the problem for Coinbase is that, “if BUSD is determined to be a security, then the company would be responsible for selling an unregistered security.”.
“Obviously Coinbase does not want to be labeled as an unregistered exchange. So, similar to what they did with Ripple (XRP), they made the wisest move and removed the token.”Cradle explains.
In fact, Cradle encourages other cryptocurrency platforms to apply the same logic as Coinbase to the full range of their services and cryptocurrencies that can qualify as securities.
The likely consequences of the news for BUSD will be a faster decline in its market cap as people decide to dump the token.. In fact, according to CoinMarketCapover the last 24 hours, the market capitalization of BUSD has decreased by 3.54% to $10.7 billion US dollars.
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