Coinbase has just announced that it will suspend Binance USD (BUSD) trading from March 13, 2023. The announcement comes two weeks after Paxos, the blockchain infrastructure company that operates BUSD, decided to stop minting stablecoins. under pressure from US regulators.
According to Coinbase, the decision to suspend BUSD trading was made following internal review and monitoring processes, which determined that the stablecoin no longer meets their listing standards. However, users can still withdraw their BUSD at any time.
Coinbase’s move could be an attempt to avoid regulatory scrutiny, as several exchanges, including Kraken and Robinhood, were recently hit by the US Securities and Exchange Commission (SEC) ) alleging the sale of unregistered securities. Timothy Cradle, Chief Legal Officer of Blockchain Intelligence Group, noted that many exchanges took similar measures in 2020 after the SEC accused Ripple Labs of raising $1.3 billion in unregistered securities, via XRP. Coinbase suspended XRP services after the lawsuit was announced and the dispute between Ripple Labs and the SEC is ongoing.
Paxos has owned and operated BUSD since its inception in 2019. The company signed an agreement with the exchange Binance to launch the stablecoin BUSD. Coinbase started listing BUSD in April 2022.
Additionally, rumors are circulating on social media that Crypto.com is likely to delist BUSD after the stablecoin faces a barrage of FUDs. According to AZCoin News, a Reddit user named Bronze|MiningSubs 53 claims to have received notice from Crypto.com that BUSD will be delisted from February 13th. However, the user claims that his BUSD balance will automatically convert to USDC.
Other users also reported similar information, while the Twitter account @TkzcW stated that it had not received any notifications from Crypto.com. However, they confirmed that the exchange halted their BUSD transfers for six hours.
According to CoinGecko data, BUSD is the third-largest stablecoin in terms of market capitalization, with a total value of around $10.6 billion, after Tether’s USDT and Circle’s USDC. The decision by Coinbase to suspend BUSD trading reflects the growing regulatory pressure on stablecoins and the cryptocurrency industry as a whole.