Coinbase Delists BUSD: What it Means for Investors and Traders Alike

 

Coinbase, one of the largest digital asset exchanges, has announced that it will delist Binance USD (BUSD) after an internal review of the stablecoin failed to meet the exchange's listing standards. The suspension of trading for BUSD will take place on March 13, 2023, on or around 12 pm ET, and will apply to all Coinbase platforms, including Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime.

This decision follows a recent order by the New York Department of Financial Services (NYDFS) to Paxos Trust, the issuer of BUSD, to stop minting new tokens as of February 21 due to unresolved issues related to Paxos' oversight of its relationship with Binance. Binance issued its own form of BUSD known as Binance-Peg BUSD on its in-house Binance Smart Chain, which the NYDFS said wasn't always backed by a sufficient quantity of reserve assets to maintain its 1:1 ratio with the U.S. dollar.

Moreover, Paxos was also sent a Wells notice by the U.S. Securities and Exchange Commission (SEC), indicating the SEC's belief that BUSD was an unregistered security. The SEC chairman, Gary Gensler, has shown a keen interest in taking action against crypto entities that trade in tokens and staking programs without registering them as securities.

Binance's CEO, Changpeng Zhao, tweeted a '4' in response to an online query about whether the SEC's action against BUSD was "more about Binance than stablecoins." This tweet was part of his new year's resolution for dealing with fear, uncertainty, and doubt (FUD) that others curiously describe as "facts."

Coinbase has assured its customers that their BUSD funds will remain accessible, and they will continue to have the ability to withdraw their funds at any time. This decision to delist BUSD highlights the increasing scrutiny on stablecoins and the importance of ensuring they meet regulatory requirements.