Binance, a prominent cryptocurrency exchange, has announced its intention to gradually discontinue support for its BUSD stablecoin, a move that will involve removing it from both spot and margin trading pairs. BUSD holders have been advised to convert their BUSD holdings into alternative assets before February of the coming year.
Binance clarified that this transition away from BUSD support is due to Paxos halting the issuance of new BUSD tokens. Despite the gradual cessation of support, Binance assured users that BUSD will maintain a 1:1 backing by USD.
In the immediate future, Binance is set to delist BUSD as a loanable asset on September 6. Moreover, withdrawals of Binance-pegged BUSD tokens through BNB Chain, Avalanche, Polygon, and Tron will cease on September 7.
As per CoinMarketCap data, BUSD currently boasts a 24-hour trading volume of nearly $900 million. The stablecoin found itself embroiled in regulatory turmoil earlier this year when Paxos was directed by the New York Department of Financial Services (NYDFS) to halt the issuance of BUSD. This episode culminated in legal action against Binance by the U.S. Commodity and Futures Trading Commission (CFTC), which alleged that Binance had offered unregistered cryptocurrency derivatives products in violation of federal law.
Recent developments indicate the potential for additional legal challenges for Binance, with the U.S. Securities and Exchange Commission (SEC) filing a sealed motion related to the exchange. This motion permits the submission of sensitive or confidential information without public disclosure of its contents, hinting at the prospect of further legal confrontations.
