• Binance CEO Changpeng Zhao recently revealed that around $2.5 billion has been transferred from the company’s stablecoin this week.
• Most of the money has been moved from Binance USD to Tether, another so-called stablecoin where tokens have a $1 value.
• The move comes after U.S regulators turned their focus on cryptocurrency and Paxos Trust Platform was ordered by the New York Department of Financial Services to cease minting tokens.
Binance Customers Withdraw Funds
Binance CEO Changpeng Zhao recently revealed that around $2.5 billion has been transferred from the company’s stablecoin this week. Most of the money has been moved from Binance USD to Tether, another so-called stablecoin where tokens have a $1 value.
Why Did They Move Money?
The move comes after U.S regulators turned their focus on cryptocurrency and Paxos Trust Platform was ordered by the New York Department of Financial Services to cease minting tokens. Further Zhao asserted that,“ Landscape is shifting.“ According to analytics website coinmarketcap.com, Tether’s market capitalization increased by about $2 billion this week due to these transfers.
What is StableCoin?
Stablecoins are used for both crypto-to-crypto and crypto-to-traditional asset exchanges which helps in providing stability while trading cryptocurrencies with other assets or currencies such as US Dollars or Euros etc.. Binance USD (BUSD) is ranked as the third-biggest stablecoin behind Tether and USD Coin at present time.
Paxos Response To SEC Claims
Paxos responded to SEC’s claims by noting: Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities law. BUSD issued by Paxos is always backed 1:1 with U.S dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts according to them..
Effect On Crypto Market
Binance Coin, the crypto exchange’s native token, first declined after receiving news about fund transferations however it later recovered and was last seen at an estimated price of $306 dollars per token according to Reuters report .