

Paxos Will Stop Minting Binance USD; Reportedly Faces SEC Lawsuit



BUSD issuer Paxos was ordered to stop minting the stablecoin and faces a potential suit from the U.S. SEC, according to reports. Binance CEO CZ responds!
CZ Warns of ‘Profound Impacts’ on Crypto
Paxos Global has been ordered by New York regulators to stop minting new BUSD stablecoins and faces a potential lawsuit from the U.S. Securities and Exchange Commission, according to a pair of news reports.
Paxos said in a press release “it will end its relationship with Binance for the branded stablecoin BUSD” and cease minting BUSD Feb. 21, in coordination with New York Department of Financial Services (NYDFS).
In a Twitter thread, Binance CEO Changpeng Zhao (CZ) said the cessation of minting would cause BUSD’s market cap to decrease over time.
Assuring users that BUSD funds were “SAFU,” CZ said the centralized exchange would continue to support BUSD for the foreseeable future but that as users migrate away from BUSD, Binance would adjust its products accordingly, i.e. moving away from using BUSD as the main trading pair.
2/ We were informed by Paxos they have been directed to cease minting new BUSD by the New York Department of Financial Services (NYDFS).
— CZ 🔶 Binance (@cz_binance) February 13, 2023
Paxos is regulated by NYDFS.
BUSD is a stablecoin wholly owned and managed by Paxos.
Paxos is the issuer of BUSD, a 1:1 USD-backed stablecoin on the Ethereum blockchain. In turn, the Binance centralized exchange maintains other versions of BUSD on other blockchains, pegged to the Ethereum coin. Paxos’ Ethereum BUSD is regulated by the State of New York and is required to backed by assets 1:1.
In the press release, Paxos confirmed BUSD was fully backed with U.S. Dollar-denominated reserves in segregated, bankruptcy remote accounts. Paxos said the BUSD decision will not impact its other products including the USDP stablecoin and Pax Gold token.
“BUSD will remain fully supported by Paxos and redeemable to onboarded customers through at least February 2024. New and existing Paxos customers will be able to redeem their funds in US dollars or convert their BUSD tokens to Pax Dollar (USDP), a regulated US dollar-backed stablecoin also issued by Paxos Trust,” according to the press release.
According to a “Consumer Alert” published by NYDFS, “DFS has ordered Paxos to cease minting Paxos-issued BUSD as a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance through Paxos-issued BUSD.”
Interestingly, the NYDFS statement stipulates the distinctions between Paxos-issued BUSD on Ethereum and Binance’s versions on other blockchains.
“It is important to note that the Department only approved the Paxos-issued BUSD on the Ethereum blockchain. The Department has not authorized Binance-Peg BUSD on any blockchain, and Binance-Peg BUSD is not issued by Paxos,” according to NYDFS.
According to reports appearing in the Wall Street Journal, citing unnamed sources, SEC enforcement staff issued a letter to Paxos known as a Wells notice that informs people or companies of a possible enforcement action. According to the Journal, the letter alleges that BUSD is an unregistered security.
The report states it is unclear whether the potential enforcement action will materialize (it still must be approved by the five SEC commissioners) or if it specifically pertains to Paxos’ issuance of BUSD, listing of BUSD or both.
CZ said he did not have information about the alleged SEC lawsuit other than what had appeared in news reports. He said he did not understand how a stablecoin could be considered a security, but that if it were ruled to be so by U.S. courts, “it will have profound impacts on how the crypto industry will develop (or not develop) in the jurisdictions where it is ruled as such.”
6/ "IF" BUSD is ruled as a security by the courts, it will have profound impacts on how the crypto industry will develop (or not develop) in the jurisdictions where it is ruled as such.
— CZ 🔶 Binance (@cz_binance) February 13, 2023
In response to a user’s comment, CZ said Binance is “exploring” other stablecoin issuers and non-USD based stablecoins.
We are exploring others, and non-USD based stablecoins.
— CZ 🔶 Binance (@cz_binance) February 13, 2023
What is Binance:
Binance positions itself as the world’s leading blockchain ecosystem and crypto-asset infrastructure provider with a financial product suite that includes the largest digital asset exchange by volume. The Binance platform aims to increase the freedom of money for users and features a comprehensive portfolio of crypto-asset products and offerings, including trading and finance, education, data and research, social good, investment and incubation, decentralization, and infrastructure solutions.
Where to find Binance:
Website | Twitter | Discord | Telegram |
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This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
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Guardians of Privacy: How ZK Technology Can Transform NFTs for the Better

With enhanced security measures and privacy preservation, ZK-powered NFTs offer participants a more inclusive and diverse ecosystem.
Privacy Meets Authenticity
In the world of blockchain technology, privacy, and decentralization are often regarded as essential elements. However, many blockchain networks prioritize consensus algorithms and stability over anonymity and trust. This raises questions about the level of privacy and decentralization offered by blockchain networks.
One of the most promising solutions to address these concerns is Zero-Knowledge Proof (ZKP) technology. ZKP is an encryption system introduced by MIT researchers Silvio Micali, Shafi Goldwasser, and Charles Rackoff in the 1980s. It allows one party (Prover) to prove the truth of a specific statement to another party (Verifier) without revealing any additional information.
ZKP ensures that only the intended recipient (you) can access your secured data, providing higher privacy and security. Zero-Knowledge Proof has emerged as a significant development in the pursuit of improved privacy in the blockchain era.
Meanwhile, NFTs have revolutionized digital ownership by creating a market for unique and indivisible digital assets. These assets range from artwork and collectibles to virtual real estate.
While NFTs have gained immense popularity, concerns about privacy, security, and authenticity persist. This is where Zero-Knowledge (ZK) technology enters the picture, offering a potential solution to enhance the NFT ecosystem.
In this article, we delve into the impact of ZK technology on NFTs, exploring the positive transformations it brings while considering potential drawbacks.
Positive Impact of ZK Technology on NFTs:
Uncompromised Privacy and Security:
Zero-knowledge proof allows individuals to verify their identity without revealing any sensitive information. Using a decentralized identity, users can verify that they are citizens of a country without giving their name or passport number instead of providing identity details.
NFT ecosystems can benefit from unprecedented levels of privacy and security provided by ZK technology. By utilizing zero-knowledge proofs, NFT owners can verify their ownership and authenticity without disclosing sensitive information or compromising their identities.
This privacy enhancement mitigates the risk of fraud and identity theft, fostering trust and confidence among NFT participants. As a result, individuals have more control over their data when using ZKP-based identity protocols.
Anti-Counterfeiting Measures:
Counterfeit assets pose a significant challenge in the NFT ecosystem, threatening the integrity and value of digital assets. However, Zero-Knowledge (ZK) technology emerges as a powerful tool to combat counterfeiting and ensure the authenticity of NFTs.
It serves as a cryptographic mechanism that allows one party to prove the validity of a statement to another party without disclosing any additional data. In the context of NFTs, the owner or creator of an NFT can provide evidence of ownership and authenticity without revealing any details that could be used to counterfeit or replicate the asset.
ZK technology also assists in establishing the provenance and history of an NFT. By utilizing zero-knowledge proofs, creators can demonstrate the creation and ownership of an asset without disclosing confidential information.
Thus, ZK technology can be vital in combating counterfeiting in NFT.
Empowering Efficient Marketplaces:
By leveraging zero-knowledge proofs, ZK technology can enable NFT sellers to verify the validity of their NFT assets while preserving their privacy. The privacy feature is particularly valuable in scenarios where sellers may be high-profile individuals or institutions who wish to maintain confidentiality.
Moreover, ZK-powered NFT marketplaces enable efficient and secure transactions. The technology allows for verifying ownership and the integrity of the NFTs without the need for extensive and time-consuming manual checks.
This mitigates the risk of fraudulent activities, such as double-spending or unauthorized modifications of NFT ownership records. The process saves time and reduces transaction costs, making it easier for buyers and sellers to participate in the NFT market.
Therefore, ZK technology can transform NFT marketplaces, revolutionizing how NFTs are bought and sold.
The current state of zero-knowledge proof, however, presents some challenges as well.
Technical Expertise Barrier with Zero-Knowledge Proof
Integrating ZK technology into NFT ecosystems may impose computational overhead, potentially slowing transaction processing times. Further, the successful integration of ZK technology into NFT platforms demands technical expertise, which may hinder broader adoption among less tech-savvy individuals. Moreover, the intersection of ZK technology and NFTs raises regulatory and legal considerations.
However, ongoing algorithm advancements and optimization techniques aim to mitigate the current challenges, paving the way for smoother operations. Simplifying user experiences and providing intuitive interfaces will be essential to make ZK-powered NFTs accessible to a wider audience. Furthermore, to foster responsible innovation in this space, it is crucial to strike the right balance between privacy, security, and compliance.
Integrating ZK technology within the NFT ecosystem unlocks vast possibilities for enhanced privacy, security, and trust. Through zero-knowledge proofs, NFTs can flourish as a secure and transparent medium for digital ownership. While challenges such as computational demands and accessibility must be addressed.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $1500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
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