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Stablecoin issuer Circle filed a complaint with regulators last fall about Binances stablecoin reserves, according to a Bloomberg report. February 13th.
Circle has reported BUSD to NY regulators
According to Bloomberg reports, Circle has notified the New York Department of Financial Services (NYDFS) about Binances stablecoin, Binance USD (BUSD).
Circle, which monitors blockchain data, has reportedly identified discrepancies in Binance’s on-chain stablecoin reserves. These discrepancies indicate that Binance did not store enough crypto to back the total number of stablecoins issued.
Circle has not publicly acknowledged that it has taken any of the above actions. Bloomberg instead attributed the information to an anonymous internal source.
Other companies have also publicly disclosed issues with Binance’s BUSD reserves in the past. However, Circles alleged decision to report on Binance is significant due to its status as a direct competitor. Binance offers the Binance USD (BUSD) stablecoin while Circle issues the USD Coin (USDC) stablecoin. In fact, due to industry-wide competition, Binance partially ended support for USDC and other major stablecoins last September.
Circle is also responsible for issuing BUSD and is regulated by the NYDFS alongside Paxos, which was targeted by regulators today.
NYDFS killed BUSD via Paxos
NYDFS has ordered Paxos to stop production of Binance USD today.Paxos said be compliant We will comply with these demands by ceasing the issuance of BUSD and terminating our relationship with Binance as far as the BUSD stablecoin is concerned.
The U.S. Securities and Exchange Commission (SEC) has also sent a Wells Notice to Paxos and appears to be preparing to take action on the issue.Paxos To tell It “absolutely disagrees” with the SEC, claiming that BUSD is not a security.
There is currently $15.9 billion worth of BUSD in circulation. Binance CEO Changpeng Zhao said the exchange will continue to support his BUSD while reducing its reliance on BUSD. Paxos says BUSD he can redeem through Paxos Trust until 2024.
Paxos will continue to issue another stablecoin, the Pax Dollar (USDP). The stablecoin remains in circulation with a total supply of $870 million.
