The world’s largest crypto exchange, Binance, has recently been the subject of a clampdown by the United States regulatory authorities, with the New York Department of Financial Services ordering Paxos to stop issuing the Binance USD (BUSD) stablecoin. BUSD is the seventh-largest cryptocurrency, with a market cap of over $16 billion.
According to a Wall Street Journal report, the SEC had issued a Wells notice to Paxos, warning of possible legal action for selling unregistered securities when issuing BUSD. Bloomberg then reported that Binance had admitted that the NYDFS had ordered Paxos Trust Co to cease issuing the stablecoin. Binance CEO Changpeng Zhao commented on Twitter, referring to an old post warning people to be aware of FUD (Fear, Uncertainty, and Doubt) created by some media outlets in the past, and to ignore new such cases.
The clampdown by the US regulatory authorities on cryptocurrency participants is a clear indication of the increasing scrutiny of the crypto industry. It is likely that other crypto exchanges and stablecoins will also come under the regulatory scope in the near future. This could have a significant impact on the cryptocurrency market, as it could lead to stricter regulations and more stringent compliance measures.