Binance Ceases BUSD Support Amid Growing Regulatory Pressure

30 Nov 2023 by Rory Kejzerko 2 min read

After its issuer Paxos was ordered to stop minting the coin back in February, Binance has officially announced that it will be ceasing support for its BUSD ($BUSD) stablecoin in December 2023.

More specifically, BUSD support will come to an end on December 15th - where per a Binance blog post from yesterday, December 31st will be the final day for BUSD withdraws to take place. After such date, any remaining BUSD balances will be automatically converted to $FDUSD, which is a stablecoin that’s issued by FinTech company First Digital Labs.

Binance’s ceasing of its BUSD stablecoin - which was recording $900 million 24-hour trade volumes back in August - comes after months of regulatory scrutiny from the New York Department of Financial Services (NYDFS).

After ordering Paxos - who also issues PayPaly’s $PYUSD stablecoin - to stop issuing the token back in February, the Commodity Futures Trading Commission (CFTC) then went on to sue leading crypto exchange under the grounds of it offering unregistered crypto derivative products in the US and violating federal law.

With this in mind - as well as recent blog posts and interviews from the man himself - it appears that new Binance CEO Richard Teng is looking to rejuvenate the company’s relationship with US authorities, as it continues tussling with regulators amid its $4.3 billion fine, the resignation of founder Changpeng ‘CZ’ Zhao, and other substantial woes (including concerns over its other native coin, Binance Smart Chain ($BNB)).

Whilst not necessarily bullish for the crypto scene, such scenario is also indicative of the safety of fully-backed stablecoins, and how if one was forced to close (as BUSD has been), there is often a seamless solution that’s able to keep users’ funds intact.

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