United States-based cryptocurrency exchange Coinbase has informed its teeming customers that the company will suspend trading for Binance stablecoin (BUSD), which will commence on March 13, 2023, around 12pm ET according to a Twitter post.
Coinbase’s decision is coming two weeks after the U.S. Securities and Exchange Commission (SEC) banned the BUSD issuer company Paxos from further minting the Binance-branded stablecoin.
However, Coinbase maintained that the suspension of BUSD trading will cut across all its exchange platforms including Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime.
Coinbase further remarked that:
“Our determination to suspend trading for BUSD is based on our own internal monitoring and review processes. We have reviewed BUSD, and we are determined that it no longer met our listing standards and will be suspended.”
It was gathered that Coinbase’s resolution to suspend trading for BUSD is geared towards avoiding scrutiny from regulators that might allege the exchange facilitated the sale of unregulated securities.
In light of the development, the Director of Regulatory Affairs at Blockchain Intelligence Group, Timothy Cradle, stated that most crypto exchanges will finally embrace the decision taken by Coinbase in order to avert loggerheads with SEC.
He referred to the incident in 2020 after the SEC alleged Ripple Labs of raising $1.3 billion in unregistered securities through the sale of XRP sale, and the decision by many exchanges to suspend XRP.
BUSD Emergence and Regulatory Concerns
Three years ago, on Sept. 4, 2019, Binance launched its stablecoin BUSD with Paxos firm taking up the role of custodian.
Having successfully partnered together for years, regulatory concerns surfaced in early Feb. 2023 when the U.S. SEC served the issuer company with a wells notice, stating that it has violated statutory guidelines.
Thereafter, the New York Department of Financial Services (NYDFS) ordered the blockchain company Paxos to stop minting BUSD. While Paxos has promised to litigate the matter in court, it remains to be seen what the future holds for BUSD stablecoin.
