Bitcoin Foundation President Brock Pierce argues that America and its authorities were created to be “very aligned” with cryptocurrencies.
Binance’s stablecoin, Binance USD, has seen roughly $6 billion in outflows following a US regulatory crackdown on the company that issues the token, according to market tracker CoinGecko.
Paxos Trust Company, which issues Binance USD, said on February 13 that the US Securities and Exchange Commission (SEC) had told the company it should have registered the product as a security and was considering taking action against the platform.
On the same day, New York’s chief financial regulator said in a consumer alert that it had instructed Paxos to stop creating the token.
Changpeng Zhao, CEO of Binance, speaks at the Delta Summit, Malta’s official Blockchain and Digital Innovation event promoting cryptocurrencies, in St Julian’s, Malta, October 4, 2018. REUTERS/Darrin Zammit Lupi (REUTERS/Darrin Zammit Lupi/Reuters Photos)
A NYDFS spokesman later told Reuters via email that Paxos breached its obligations to “tailored, periodic risk assessments” and due diligence checks on Binance and Binance USD customers needed to stop “bad actors from using the platform.”
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Binance CEO Changpeng Zhao said the regulator’s decision meant the token’s market capitalization would shrink over time.
Changpeng Zhao, founder and CEO of Binance, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France June 16, 2022. REUTERS/Benoit Tessier/File Photo (REUTERS/Benoit Tessier/File Photo/Reuters Photos)
On Wednesday, the value of all Binance USD was around $10.5 billion, up from $16.1 billion on February 13, according to market tracker CoinGecko.
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The Financial Times reported on Wednesday that investors have pulled more than $6 billion from Binance’s token in the past month, citing data from blockchain analytics firm Nansen.
SEC Chairman Gary Gensler said he believes stablecoins are securities. In this photo taken in Frankfurt, Hesse, Germany – April 17, 2018: Gensler is pictured against a background of various cryptocurrency coins. (iStock/Reuters)
Analysts said the NYDFS move represented a setback in Binance’s efforts to gain market share from larger stablecoins.
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SEC Chairman Gary Gensler has previously stated that he believes some stablecoins are securities.