Paxos, the issuer of the Binance stablecoin BUSD has announced that it will no longer mint the dollar-pegged asset from Feb. 21.
The move came in response to an SEC threat of legal action, accusing the New York Department of Financial Services (NYDFS) regulated company of selling unregistered securities, even though BUSD is a stablecoin.
In a statement on Feb. 13, the company said:
“Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws.”
As a result, panic has set in once again, and redemptions of BUSD have skyrocketed over the past few hours.
Binance and BUSD in the Crosshairs
Paxos stated that its BUSD reserves are fully backed 1:1 to the dollar, but that hasn’t prevented the exodus from the stablecoin. Industry analysts have labeled it as a clandestine attack on Binance.
