Binance to end BUSD support in December as regulatory pressures mount

November 30, 2023 10:26 PM AEDT | By Invezz

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Binance to end BUSD support in December as regulatory pressures mount — Image source: Invezz

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Binance has announced that it will stop supporting its native stablecoin, BUSD, on December 15. Users have until February 2024 to redeem their BUSD, while withdrawals for the stablecoin coin will end on December 31.

Binance says that any BUSD balances on accounts except for users in Japan, Poland, France, Italy, and Kazakhstan, as of December 31, will be automatically converted to stablecoin First Digital USD (FDUSD). Popular trading pairs such as BTC/BUSD and ETH/USD will be phased out from December 11 up to December 15. Any open orders on the spot BUSD trading pairs will be automatically closed. Binance urged users to continue converting the BUSDs to FDUSD at a 1:1 conversion. The exchange stated:

Users may trade their BUSD balances for FDUSD at zero trading fees, or convert their BUSD balances to FDUSD on Binance Convert at a 1:1 conversion rate with zero fees.

Binance’s changes also cover other services such as loan and OTC services, earn products, futures & margins, deposits, withdrawals, and conversions on other networks. In these services, BUSD will be delisted as the stablecoin pair.

The move happened after Paxos stopped minting the BUSD stablecoin after a request by the New York Department of Financial Services (NYDFS) in February 2023. The exchange initially issued the notice to “gradually” end BUSD support and products in August this year, following Paxo’s decision. NYDFS cited “unresolved issues” in the request to Paxos, with regulators considering the stablecoin as one of Binance’s unregulated securities.

Move sums up Binance’s regulatory woes

The move by the world’s leading crypto exchanges comes amid a raft of regulatory pressures. Recently, Binance agreed with US regulators to pay a $4.3 billion penalty to settle an ongoing criminal case. CEO Changpeng Zhao was also forced to resign, with criminal charges considered against him. New CEO, Richard Teng, has promised to work with regulators as he steers the exchange toward compliance.

The cessation of BUSD is a blow to Binance as the stablecoin was one of the largest by market cap. In November 2022, the market value of BUSD surpassed $23.3 billion.

Meanwhile, Binance’s native token, BNB, fell by nearly 2% on Thursday following the announcement. However, the decline is part of the broader market slowdown, with leading cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) down by almost similar margins.

The post Binance to end BUSD support in December as regulatory pressures mount appeared first on Invezz

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