What Happened on Feb. 13th | $BUSD Halts New Issuance and Paxos to End Relationship with Binance for the Stablecoin

Paxos announced that it will end its relationship with Binance for the branded stablecoin $BUSD. The decision was made in close coordination with the New York Department of Financial Services and Paxos Trust, a regulated institution, will continue to manage the $BUSD dollar reserves.

All $BUSD tokens are fully backed by US dollar-denominated reserves and are redeemable for onboarded customers until at least February 2024. Paxos will also allow customers to redeem their funds in US dollars or convert their $BUSD tokens to Pax Dollar ($USDP), another regulated US dollar-backed stablecoin. This move does not impact Paxos' ability to continue serving its customers or achieve its long-term business goals.

After the news came out, the market experienced widespread panic, and the major crypto asset price dropped.

Biggest Gainers & Losers

Headlines

SEC to Sue Paxos for Listing $BUSD: the U.S. Securities and Exchange Commission (SEC) plans to sue Paxos, alleging that $BUSD issued by it is an unregistered security.

New York Department of Financial Services asked Paxos to stop issuing $BUSD: $BUSD is fully backed by liquid assets and has published monthly reserve reports. While this is bad news for the industry, it shouldn’t cause FUD on $BUSD itself. CZ tweeted that Binance will continue to support $BUSD for the foreseeable future, and will make product adjustments accordingly. eg, move away from using $BUSD as the main pair for trading, etc.

EU Banks Required to Assign Maximum Risk to Crypto: The European Parliament has released a draft law that would require EU banks to place the maximum possible risk weight on crypto assets. This could significantly impact the traditional financial sector's involvement with digital assets.

New projects from Arbitrum and Cosmos:

Dsquared, an Option-Based DeFi Vault on Arbitrum, Will Begin Public Token Sales on February 15th

Cosmos Inter-Chain Asset Management Protocol QuasarFi Launched Public Testnet

Other news in case you missed it:

Canto Governance to Vote on Reducing 30% Emissions and Liquidity Mining Incentives

Rainbow Bridge Between Ethereum and NEAR Resumes Operations

LSD Prices Change