- The announcement follows a threat by the SEC to sue the stablecoin issuer Paxos for flaunting the law.
- The step signifies the regulatory headwinds Binance is facing in the US.
- Its native BNB token is down 3% on the weekly chart following the announcement
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US cryptocurrency exchange Coinbase has announced that it would suspend the trading of the Binance-themed stablecoin, BUSD, next month, a move that had caused panic across the cryptoland. The step is reportedly in line with Coinbase’s listing standards.
BUSD would be suspended on Coinbase.com (simple and advanced trade), Coinbase Pro, Coinbase exchange, and Coinbase Prime.
‘‘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 noon ET,’’ the company wrote on Twitter. BUSD will remain available for withdrawals.
Regulatory pressure mounts on Binance as stablecoins wars continue
The announcement comes barely a month after BUSD issuer Paxos came under fire when the Securities and Exchange Commission (SEC) threatened to sue the company for issuing the stablecoin as unregistered securities. Paxos was later asked by the New York Financial Services Department to stop minting BUSD and terminate its relationship with Binance.
Pundits now believe that the step taken by Coinbase is aimed at remaining on good terms with the regulators. The US-based exchange has struggled to defend some of its services, including Coinbase staking program. CEO Brian Armstrong recently announced that he was ready to defend his company against the SEC, which recently fined rival platform Kraken for operating a similar program without proper registration. Per the agency, staking constitutes offering security and must be registered.
BUSD now faces downward pressure following the announcement. Although the stablecoin maintains its dollar peg, data from CoinMarketCap shows that its market cap has declined from $13 billion to $10.7 billion in the last week. On the other hand, Binance’s native token, BNB, is also facing a bear momentum. The digital asset has dropped 1.85% in the past day and 3.78% in the past week.
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