Binance has reportedly admitted that the New York Department of Financial Services ordered Paxos to stop issuing the Binance USD stablecoin.
BUSD with a market cap of over $16 billion, is currently the seventh-largest cryptocurrency.
This continues the clampdown by the United States against several cryptocurrency participants. After falling victim to the SEC last week, Kraken had to halt its staking services, Binance and Paxos seem to be under the regulatory scope at the moment.
According to a WSJ report cited by CryptoPotato, it was noted that Paxos had received issued a Wells notice issued by the SEC to warn them of possible legal actions on claims that the company is selling unregistered securities as it pertains to BUSD.
More recent information from the Wall Street Journal supported the report claiming that Binance admitted to the NYDFS ordering Paxos Trust Co to seize issuance of the stablecoin.
Bloomberg and the WSJ said Binance had provided the statement, but the CEO of the company – Changpeng Zhao – had a different comment on Twitter, where he referred to an old post reminding people that they should be aware of the Fear, Uncertainty, and Doubt (FUD) created in the past by some media outlet, and should discard new such cases.
It is important to note that Paxos issues and has BUSD in its full custody BUSD, as highlighted by CZ in a more recent update.
He further ascertained that all funds are SAFU on both Paxos and Binance while adding that the former will continue to service the stablecoin, and also manage redemptions.
Featured Image Source: Binance