Coinbase, the second-largest cryptocurrency exchange in the world, has announced the suspension of trade in Binance USD (BUSD) as of March 13.
The move comes after US regulators began investigating the stablecoin as a possible unregistered security. Coinbase stated that BUSD no longer met their listing standards, prompting the suspension.
However, users can still access and withdraw their BUSD after the suspension, as stated by Coinbase on Twitter. BUSD is currently the third largest stablecoin, with a market capitalization of $10.6 billion, according to CoinMarketCap data.
Paxos, the firm that owns and operates BUSD, was recently ordered to suspend the issuance of the Ethereum-based stablecoin by the New York Department of Financial Services (NYDFS), effective on February 21.
However, Paxos stated that it will support the stablecoin until at least February 2024. Paxos also received a Wells notice from the US Securities and Exchange Commission earlier this month, warning the company of a possible enforcement action from the agency, which saw the stablecoin as an unregistered financial security.
Binance, the world’s largest crypto exchange, stated in an email earlier this month that it only licenses its brand to Paxos for use with BUSD.
This latest development may impact BUSD’s standing in the market, as Coinbase is a major player in the crypto industry.
In a tweet on February 15, Coinbase had stated that US dollar-backed stablecoins are not securities. The suspension of BUSD trading raises questions about the future of stablecoins and their regulation, as regulators continue to scrutinize the crypto industry.