The third-largest stablecoin in the world, Binance USD, is purportedly under attack from the SEC.
According to the Wall Street Journal, the U.S. Securities and Exchange Commission intends to file a lawsuit against cryptocurrency trading company Paxos Trust for creating and selling the BUSD stablecoin without first registering it as a security.
Paxos said in a press statement that it had stopped halting BUSD and would “terminate its collaboration with Binance” for the stablecoin. The existing BUSD coins are completely backed and will be redeemed for at least a year.
However, earlier today, CZ, the founder, and CEO of Binance, tweeted that Paxos had notified him that the New York Department of Financial Services, where Paxos is registered and subject to regulation, had ordered the business to stop issuing BUSD.
Since 2019, when Paxos Trust entered into a license arrangement with Binance, the largest cryptocurrency exchange in the world, to use its name and brand, the BUSD stablecoin company has been owned and run by Paxos Trust.
BUSD has a market cap of over $16 billion, according to CoinGecko, mostly as a result of its popularity on Binance’s exchange. However, as it is a stablecoin, its market capitalization and trading volume shouldn’t, in principle, have an impact on the product’s value.