Cryptocurrency firm Paxos will cease issuing new Binance USD, or BUSD , stablecoins under the direction of New York state’s financial regulator, …

Financial watchdogs in New York have ordered Paxos Trust Co. to stop issuing BUSD, the stablecoin from Binance.

With the approval of the NYDFS, cryptocurrency exchange Binance and Paxos released the USD-pegged stablecoin Binance USD (BUSD) in 2019.

In a statement released on Monday, Paxos announced that it would no longer support BUSD and Binance. The business announced that it will discontinue producing the BUSD branded stablecoin on February 21. The business also said that existing tokens will continue to be fully backed and redeemable for USD or Paxo’s Pax Dollar through at least February 2024. (USDP).

The New York Department of Financial Services (NYDFS), according to Paxos, is in charge of the action, and the business is coordinating with the regulator.

The disclosure comes in response to a Wall Street Journal article claiming that Paxos would be sued by the Securities and Exchange Commission (SEC) for breaking investor protection regulations.

Paxos’ choice to quit providing BUSD received a prompt response on Twitter from Changpeng Zhao, CEO of Binance.

He stated:

  • Paxos advised us that the New York Department of Financial Services has ordered them to stop issuing new BUSD (NYDFS).

Zhao further stated that Paxos had guaranteed Binance that the money were completely covered by bank reserves.

Also from him:

  • BUSD will be supported by Binance for the foreseeable future.

Another cryptocurrency exchange, Kraken, came under SEC’s scrutiny for providing crypto staking services. The SEC fined the company $30 million and ordered it to stop providing the service.

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