Coinspeaker
NYDFS Asks Paxos to Stop Issuing Binance’s BUSD Stablecoin
In a first major crackdown on the stablecoin market, the New York Department of Financial Services (NYDFS) has asked Paxos Trust Co. to stop issuing the Binance USD (BUSD) stablecoin on an immediate basis.
BUSD is entirely owned and managed by Paxos. With the NYDFS order, Paxos will stop any further issuance. However, it will continue to service the product and manage redemptions through 2024. Both – Binance and Paxos – have assured that the funds are completely SAFU and fully covered by the reserves in their banks.
Last week, the news broke out that NYDFS has started probing Paxos. After the recent action by NYDFS, Paxos announced that it will seize and further issuance of BUSD stablecoins starting February 21. As said, the company still plans to honor BUSD redemptions through February 2024. In its announcement, Paxos noted:
“New and existing Paxos customers will be able to redeem their funds in US dollars
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