Binance is increasingly taking heat from regulators on multiple fronts, with its US business most vulnerable to ongoing crackdown by the Securities and Exchange Commission (SEC).
Perhaps most pressing for the exchange in the US now is the SEC’s claim that Binance.US is operating an “unregistered securities exchange in the United States”.
Claims were communicated to the SEC during bankruptcy hearings about the failed crypto lender voyager digital Earlier this month, an SEC official also said the agency believed Voyager’s VGX token violated US securities laws.
Binance.US plans to acquire Voyager Digital in a deal worth $1.3 billion. the deal was earlier approved by a judge in bankruptcy court, but after Stopped by US regulators on the grounds that it violated the laws on unregistered offer and sale of securities.
BUSD stablecoin in the spotlight
In addition to issues with the alleged sale of unregistered securities, US regulators have also cracked down on Binance’s offering. Binance USD (BUSD) The stablecoin, which is issued by Paxos Trust Company, a regulated US company.
The stablecoin will no longer be mined after the New York Department of Financial Services, which regulates Paxos, said there were “several unresolved issues related to Paxos’ oversight of its relationship with Binance.”
Besides, the SEC threatens to sue Paxos On issuing BUSD in the so-called Wales notice. In the notice, the SEC called BUSD an unregistered security.
As a result of these actions, Binance CEO changpeng zhao (CZ) is Said That the market cap of BUSD will decline over time. He also acknowledged that Binance and Binance users will “move away from using BUSD as a primary trading pair” over time.
Paxos has stated on its end that it will be “terminating its relationship with Binance” and that it will stop issuing new BUSD tokens as of February 21.
Coinbase delisted BUSD
Meanwhile, US-based crypto exchange Coinbase said as recently as last week that it would No longer supports trading with BUSDciting its “listing standards” as the reason for the decision.
“We have disabled trading for Binance USD (BUSD). Your trading funds will remain accessible to you, and you will continue to have the ability to withdraw your funds,” the exchange said in an announcement at the time.
Despite all the regulatory hurdles, however, Binance has continued to operate its US-based business, insisting that it is “a very separate entity” from the larger international exchange. And given the company’s proven track record in playing the regulatory game in multiple jurisdictions around the world, it’s likely that Binance may continue to find a way around regulatory hurdles and government officials who want to see it shut down.