Coinbase, one of the world’s largest crypto exchanges, has decided to delist the Binance USD (BUSD) stablecoin starting March 13. The decision comes in the backdrop of the BUSD token facing legal challenges in the US. Paxos, the stablecoin issuer that wholly owned and managed the Binance USD stablecoin is facing a lawsuit from the Securities and Exchange Commission in the US. Paxos has been accused of issuing the BUSD token as an unregistered security, Paxos meanwhile, has denied the allegation.
“We’ve determined that BUSD does not currently meet our standards for trading support,” a Coinbase spokesperson reportedly said, not elaborating on the details.
Launched in 2019, the BUSD stablecoin built on the Ethereum blockchain, currently has a market valuation of over $10 billion (roughly Rs. 87,987 crore). As per CoinMarketCap, the market cap for BUSD dropped by three percent in the last 24 hours.
At the time of writing, each BUSD was trading at $1 (roughly Rs. 82), showed the crypto price tracker by Gadgets 360.
Coinbase claims on its website that its digital asset listings group has a vote to get any cryptocurrency listed or delisted.
Assets are regularly analysed on the basis of their legal status, technical security quotient as well as compliance with the laws, violations of which could get assets delisted from Coinbase.
We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent reviews, Coinbase will suspend trading for Binance USD (BUSD) on March 13, 2023, on or around 12pm ET.
— Coinbase Assets (@CoinbaseAssets) February 27, 2023
The decision will be executed across Coinbase’s suite of services including Coinbase.com, Coinbase Pro, Coinbase Prime, as well as Coinbase Exchange.
Meanwhile, Coinbase will continue to allow its users to access and withdraw their BUSD funds despite its decision to delist the token. Users, however, will not be able to trade the token on Coinbase after March 13.
BUSD issuer Paxos was served a notice by the New York State Department of Financial Services earlier in February. The financial authority has instructed Paxos to stop issuing BUSD tokens.
Soon after the news broke, Coinbase had noted that stablecoins are not considered as securities in the US.
This week the NYDFS ordered US-based Paxos to stop issuing US dollar-denominated stablecoin BUSD and the SEC issued a Wells notice to Paxos. We don’t know what aspects of BUSD might be of interest to the SEC.
What we do know: stablecoins are not securities :thread:— Coinbase (@coinbase) February 15, 2023
Pegged against a fiat currency like the US dollar or reserved assets like gold, stablecoins are crypto assets that latch their values to their underlaying assets.
This prevents stablecoins against fluctuations in the volatile crypto industry as compared to other assets.
Tether, USD Coin, and Ripple are among other popular stablecoins pegged against the US dollar just like the BUSD.
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