New York's chief financial regulator has ordered Paxos, the company behind the stablecoin of major crypto exchange Binance, to stop issuing the token, Paxos and the regulator said in separate statements on Monday.
Binance CEO Changpeng Zhao wrote in a series of tweets earlier on Monday that the regulator's decision meant that "BUSD market cap will only decrease over time," adding that Paxos assured Binance the funds were fully covered by Paxos' bank reserves.Binance USD is the seventh-largest cryptocurrency, with more than $16 billion in circulation, according to market tracker CoinGecko.
The NYDFS said it was "monitoring Paxos closely to verify that the company can facilitate redemptions in an orderly fashion subject to enhanced, risk-based, compliance protocols." The NYDFS clampdown, first reported by the Wall Street Journal, comes amid a wider crackdown on cryptocurrencies and Binance by U.S. regulators. The Justice Department is investigating Binance for suspected money laundering and sanctions violations,
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