Binance withdrew more than $900 million in 24 hours

Binance withdrew more than $900 million in 24 hours

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Author: Robert Strickland
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Binance withdrew more than $900 million in 24 hours
Capitalization of BUSD stablecoin decreased by $400 million in 24 hours

According to research platform Dune, on February 13, capital outflows from cryptocurrency exchange Binance totaled $916 million, making it the highest daily withdrawal since Nov. 24, when $1 billion worth of assets were transferred from Binance.

The withdrawal of funds by users of the exchange on February 13 followed an order from the New York Financial Services Department (NYDFS) for Paxos to stop issuing Binance USD (BUSD) stablecoin and a report that the Securities and Exchange Commission (SEC) intends to sue Paxos.

"This is a declaration of war. Why the BUSD issue ban is a major development

The Binance-branded BUSD token is the third most capitalized Stablecoin after Tether (USDT) and USD Coin (USDC) at $15.7 billion, according to CoinGecko as of Feb. 14. On the morning of February 13, the capitalization of the asset reached $16.1 billion, it decreased by $400 million during the day.

The head of the exchange Changpeng Zhao immediately acknowledged that after the ban on the issue of new tokens, the capitalization of the asset will decrease and investors will start to move to other stablecoins.

The New York regulator attributed the ban on BUSD to the fact that Paxos, the issuer of the stablecoin, "violated its obligation" to conduct periodic risk assessments and user verification.

According to a Bloomberg report, Circle, the issuer of rival USDC stablecoin, filed a complaint with the NYDFS against Binance last fall. Circle reported to the regulator that Binance wasn't storing enough cryptocurrency

At the same time, the SEC, for its part, is preparing to sue Paxos, arguing that BUSD is unregistered security. On Feb. 13, Paxos said it strongly disagrees with the SEC because BUSD is not a security under federal securities laws and added that the company is prepared to "vigorously litigate" if necessary.

Binance's token exchange rates reacted by declining to the regulators' actions. BNB fell from $321 to $284 (11.5%), with the coin trading at $291 as of 11:50 BUSD briefly lost its peg to the U.S. dollar, dropping to $0.992, but has recovered and is hovering around $1-$0.99. On February 14, Zhao said on his Twitter page that the token had regained its peg, writing that "FUD, uncertainty, and doubt

 

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