- Paxos has also halted the minting of new BUSD tokens as ordered.
- Existing BUSD will however remain fully-backed and redeemable via Paxos until at least February 2024
- Binance CEO says exchange will continue to support BUSD
Paxos, the blockchain and tokenization platform that also issues the stablecoin Binance USD (BUSD), has announced it is terminating its relationship with global cryptocurrency exchange Binance.
According to a Paxos press release on Monday, the company has ended its partnership with Binance with respect to the branding of the BUSD stablecoin. Today’s announcement means the company won’t continue using the Binance brand for the stablecoin.
As highlighted by CoinJournal, the development comes after the New York Department of Financial Services (NYDFS) directed Paxos to cease issuing new BUSD.
The SEC is also reportedly suing Paxos for issuing unregistered securities, something that has the crypto community questioning how that applies to a stablecoin.
Paxos ceases BUSD issuance
In ending their relationship with Binance, Paxos also announced it will, effective 21 February 2023, stop minting new BUSD tokens as it looks to comply with the NYDFS order.
“Paxos has always prioritized the safety of its customers’ assets. That was true at our founding and remains true today. BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024,” the firm wrote.
Customers who want to exit the stablecoin can choose to redeem their money in US dollars or they can convert BUSD tokens to Paxos’ other stablecoin Pax Dollar (USDP).
On Monday, Binance CEO Changpeng Zhao said that the crypto exchange will continue to support the BUSD token. However, the platform will also look to a new stablecoin, including the option of a non-USD token.
7/ Binance will continue to support BUSD for the foreseeable future. We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading, etc.
– CZ 🔶 Binance (@cz_binance) February 13, 2023
The negative news around the stablecoin has seen the price of Binance Coin slip as BUSD holders migrated to other stablecoins. BNB price is currently changing hands around $294, nearly 5% down in the past 24 hours.