America’s cryptocurrency crackdown has reportedly led investors to pull $6 billion from a Binance-branded stablecoin.
Last month, the New York Department of Financial Services (NYDFS) suspended new issuance of BUSD, due to what it said were unresolved issues connected to Binance’s relationship with Paxos, which minted the token for the world’s largest crypto exchange.
Investors have since rushed to withdraw their funds, leading the BUSD in circulation to drop by more than a third, the Financial Times (FT) reported Wednesday (March 1), citing data from blockchain analytics platform Nansen.
Analysts interviewed by the FT said the withdrawals could drag down Binance’s overall financial performance.
“This will probably hurt Binance’s bottom line as BUSD is a significant part of the business,” Ilan Solot, co-head of digital assets at Marex Solutions, told the news outlet.
Related: Binance Promises To Create Crypto Recovery Fund, Calls For Regulation
Reached for comment by PYMNTS Wednesday, a Binance spokesperson downplayed the FT’s report, sharing this company statement:
“As we’ve noted previously, BUSD market cap will only decrease over time. We expect that this trading volume will move to other stablecoin pairs.”
Binance CEO Changpeng Zhao said as much on Twitter last month, telling his followers BUSD “was never a big business for us” and that he initially thought the project might fail.
The news comes two days after crypto exchange Coinbase said it was dropping BUSD from its platform, saying that the coin would be delisted March 13 after failing to meet Coinbase’s internal listing standards.
