On Monday, Paxos announced that they would cease issuing the $16 billion Binance USD (BUSD) stablecoin in light of growing regulatory scrutiny. Since then, blockchain data shows that Paxos has burned over $700 million worth of BUSD tokens. This is a decisive action demonstrating their commitment to compliance and protecting users’ investments alike.
Paxos Burned in 9 Transactions Totaling $700 Million
According to data from Nansen, a blockchain intelligence firm, an immense amount of BUSD tokens totaling $703 million were moved to a burn address in just 27 hours beginning on Monday morning. This impressive transfer removed the coins from circulation and is certainly noteworthy.
On Monday 13:47 UTC, Paxos Treasury initiated the first transaction of $144.5 million worth of BUSD – an astonishing two hours after their announcement – and eight more transactions ensued within 27 hours, with a grand total amounting to approximately $559 million in value. A U.S. dollar-pegged stablecoin, BUSD is supported by liquid assets like treasury bonds and cash equivalents that enable holders to redeem it 1:1 anytime they choose; its issuance under New York Department of Financial Services regulation means users can trust its reliability on the market.
The Amount Burned Makes Up 6% of the Total Circulation
Investors seem to be fleeing BUSD in a hurry, with $700 million redeemed within 24 hours – that’s 6% of the total coins issued! Changpeng Zhao, CEO of Binance, has tweeted that we can expect this market capitalization to decrease over time. Suffice it to say that there are better options for investors and traders alike.
On Monday, reports indicated that the SEC had sent a Wells notice to Paxos for allegedly issuing unregistered securities. This signals an impending enforcement action from the regulator. Simultaneously, The New York Department of Financial Services is investigating and has forbidden any additional minting of Binance USD (BUSD) tokens by Paxos.
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