- Coinbase will suspend trading services to Binance starting mid-March
- The exchange stated that the decision comes after evaluating whether the stablecoin meets their listing standards
Coinbase, a leading U.S. crypto exchange, announced that it would suspend the trading of Binance USD (BUSD). The decision comes right when the U.S. Securities and Exchanges Commission (SEC) labeled the stablecoin as a security. Notably, Coinbase is the first major U.S.-based crypto exchange to put a distance between the stablecoin after regulatory action was brought to light.
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The crypto exchange stated that it would pause BUSD trading on March 13, 2023. This suspension would apply to Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime. The American crypto exchange further stated that users would be able to withdraw their coins at any time. The exchange said,
“We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent reviews, Coinbase will suspend trading for Binance USD (BUSD) on March 13, 2023, on or around 12pm ET.”
Notably, the news has not had a significant impact on the stablecoin at press time. According to CoinMarketCap, BUSD still held the third position among the top stablecoins in the market, with the coin maintaining its dollar peg.
Coinbase’s move a reaction to SEC action?
On February 13, 2023, Paxos Trust Company- the company issuing BUSD – confirmed that the firm had received a Wells notice from the SEC at the beginning of the month. The notice stated that staff at the commission was “considering recommending an action” claiming that the stablecoin was a security. And, as a result, the firm was required to register BUSD under federal securities laws.
However, the BUSD issuer disagreed with SEC’s argument, claiming that the stablecoin was not a security. Paxos even stated that it would defend BUSD‘s status through litigation if required. As of February 18, 2023, the firm’s CEO – Charles Cascarilla – stated that was in “constructive discussions” with the commission over the matter.
Moreover, Paxos’ issue did not just end with the SEC’s regulatory action. The New York Department of Financial Services ordered the firm to stop minting Binance USD. This was because of “several unresolved issues related to Paxos’ oversight of its relationship with Binance in regard to Paxos-issued BUSD.” Paxos has since ended its relationship with Binance, citing changing market conditions as the reason.
