Coinbase has officially delisted Binance-branded token BUSD, the world’s third largest stablecoin, citing a recent review of its listed assets to remove those that no longer meet its standards.
In a pair of tweets, the exchange said the suspension will affect Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime platforms. However, the token holders will still be able to access their BUSDs and withdraw them at any time.
Coinbase explained that an internal committee called “Digital Asset Listing Group” votes on what’s available for trading on the platform. The company highlighted that CEO Brian Armstrong as well as other global board members are not part of the committee.
Coinbase tweeted that “Our determination to suspend trading for BUSD is based on our own internal monitoring and review processes. When reviewing BUSD, we determined that it no longer met our listing standards and will be suspended.”
We have disabled trading for Binance USD (BUSD). Your BUSD funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time. https://t.co/jfpCZX7UTC
— Coinbase Assets (@CoinbaseAssets) March 13, 2023
Binance, the world’s largest cryptocurrency exchange by trading volumes, launched its native stablecoin back in 2019. BUSD was built in association with US-based Paxos, which serves as its issuer as well as custodian of fiat reserves. Since then, the $16 billion stablecoin has been up for direct purchase and redemption on the Paxos platform, as well as for trading on Binance.com and other exchanges.
The development comes shortly after the New York Department of Financial Services (NYDFS) ordered Paxos Trust Co., which has its own stablecoin, Pax dollar (USDP), to stop minting any new BUSDs. To assure holders, Binance said that Paxos will continue to manage redemptions of BUSDs.
The SEC also plans to sue Paxos for violating investor protection rules. The issuer was already told of the planned enforcement action as the regulator claims that Binance USD is an unregistered security.
Pasox has refuted the SEC’s claims and noted that it” categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws.” The company added that the SEC Wells notice pertains only to BUSD and there are no other allegations against its business.
Although the issuer said it will contest the regulatory claims, the legal battle with the SEC could take years if the company fights the order in court. As such, those who keep BUSD listed on their platforms may be at risk of being sued and fined if the SEC wins its case and the court deems the stablecoin unregistered securities.