Binance USD Stablecoin Gets Booted Off Coinbase Amid Mounting Regulatory Pressure
San Francisco-based cryptocurrency exchange Coinbase is kicking Binance USD (BUSD) off its platform. Coinbase cited failure to meet its listing standards as the rationale behind the decision to delist the Binance-branded dollar-pegged stablecoin.
This comes less than a month after crypto brokerage firm Paxos Trust announced it would stop minting BUSD after receiving a notice from the New York Department of Financial Services, the state regulator overseeing it, as well as a Wells Notice from the U.S. Securities and Exchange Commission (SEC).
Coinbase Halts BUSD Trading
Coinbase is delisting BUSD.
In a Twitter thread on Monday, Coinbase, arguably one of the world’s best-known crypto exchanges, announced its intention to remove BUSD from its platform starting from March 13. The expulsion affects Coinbase.com (simple and advanced), Coinbase Pro, Coinbase Exchange, and Coinbase Prime. Customers will still be able to access their BUSD funds and withdraw them at any time, Coinbase noted.
Coinbase’s BUSD suspension follows a recent internal review, a spokesperson of the exchange explained, adding that “when reviewing BUSD, we determined that it no longer met our listing standards and will be suspended.”
Earlier this month, Paxos disclosed it would end its relationship with Binance ahead of a potential lawsuit from the SEC over the issuance of BUSD, the world’s third-largest stablecoin by market cap. The securities watchdog intends to launch enforcement action against Paxos for allegedly violating investor protection laws.
For some observers, the SEC’s action against BUSD is more about Binance, the exchange that doesn’t have a clearly defined headquarters, than stablecoins. Most notably, the SEC didn’t take action against Paxos’ gold-backed stablecoin known as Pax Gold (PAXG). Making things more interesting, Binance recently admitted gaps in regulatory compliance and is now expecting to pay fines for past misconduct.
Coinbase’s action to distance itself from BUSD is likely an attempt to evade scrutiny from U.S. regulators who might claim that the exchange facilitated the sale of unregistered securities.
Yet, Coinbase still has a potential SEC probe hanging over its head examining whether the exchange let Americans trade crypto assets that should have been registered as securities. The company, however, maintains it did not breach any federal security laws.