Binance reserves lost $2.3B following BUSD debacle

Within four days after the Securities and Exchange Commission (SEC) issued a warning to BUSD issuer Paxos, investors withdrew about $2.3 billion worth of Binance USD (BUSD) from Binance.

The SEC requested Paxos to stop production of BUSD on February 13th. At the time, Binance held just over 14.4 billion of his BUSD tokens in reserve. After the SEC’s intervention, his BUSD pool on the exchange began to shrink rapidly.

Between February 13th and February 17th, Binance’s BUSD holdings decreased by 16% to around 12.1 billion tokens.

SEC vs BUSD

After the SEC issued a Wells Notice to Paxos on February 13, Binance CEO Changpeng Zhao (CZ) told the SEC that Paxos will continue to service the product and manage redemptions. bottom.

However, on the same day, Paxos announced that it will stop issuing BUSD from February 21, 2023. Meanwhile, the BNB token has responded to this news by losing over 9% of its value.

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Journalist at CryptoSlate

Zeynep is an academic turned cryptocurrency in 2018. With a social science background, she has a particular interest in the social impact of blockchain and cryptocurrencies, and a strong believer in their transformative power.