Binance USD (BUSD), a stablecoin issued by Paxos, has experienced a market capitalization drop below $10 billion for the first time in two years. The decline is allegedly due to regulatory actions taken by the United States against its token issuer, Paxos, and its potential non-compliance with investor protection laws.
Potential Lawsuit Against Paxos by the SEC
According to Cointelegraph, the Securities and Exchange Commission (SEC) has been considering a lawsuit against Paxos due to potential violations of investor protection laws. This has led the New York District of Financial Services (NYDFS) to halt the minting and issuance of BUSD on February 12, 2023.
Also Read: Paxos in Talks with SEC Over Binance USD Registration
Coinbase Delisted BUSD
Coinbase, a cryptocurrency exchange, has announced that BUSD will be delisted from its platform on March 13, 2023, citing non-compliance with its listing standards. Experts have pointed to a wider drop in the cryptocurrency market capitalization, with the Silvergate Bank controversy also being blamed.
The Binance-branded stablecoin has been on an upward trend, making it the third-largest stablecoin behind Tether (USDT) and USD Coin (USDC). However, BUSD currently only ranks tenth in terms of market capitalization among all cryptocurrencies.
Binance USD (BUSD) has experienced a significant market capitalization drop, possibly due to regulatory actions taken by the United States against its issuer, Paxos. With Coinbase set to delist BUSD, the cryptocurrency market capitalization has also seen a wider decline, with the Silvergate Bank controversy being cited as a potential cause.
