Coinbase Suspends Binance USD Stablecoin Trading• March 1, 2023 6:45 pm • Comments
It looks like the SEC’s accusation of the Binance USD (BUSD) stable coin being a security has recently affected where the digital asset can be traded.
Coinbase just announced that they will be suspending the trading of the stable coin on its exchange and the suspension will be effective mid-March.
The recent claim that BUSD is a security has shocked many within the crypto community due to the fact that a stable coin is not something that can be used to generate profits.
As a result, the SEC’s accusation did not make sense and could potentially signal a lot of regulatory trouble for the industry in the neat future if the SEC decides to go after other major stable coins like Tether and USDC.
After all, stable coins make up a significant portion of crypto trading volume and will likely affect the markets drastically if they can no longer be traded.
Coinbase to suspend $BUSD stablecoin trading.
— crypt.kx (@KxCrypt) February 28, 2023
The exact reason for the delisting has not been mentioned. However, Coinbase stated that they regularly monitored the assets on the exchange to ensure they met the listing standards.
Details from the tweet revealed that trading will be suspended on Coinbase.com for both simple and advanced trades, Coinbase Pro, Coinbase Exchange, and Prime.
However, the exchange made it clear that the BUSD funds will be accessible and can be withdrawn at any time.
Binance and BUSD are going through a tough time due to increased SEC scrutiny of stablecoin issuer Paxos. Paxos was asked to stop issuing BUSD, and the stablecoin started slipping away from its peg.
However, at press time, the BUSD has regained its peg. There has also been a drop in the market cap for BUSD recently due to ongoing issues.
As of right now, there haven’t been many other exchanges that have made the same announcement, but it is expected that US-based crypto exchanges will likely have a lot of pressure to do so from the SEC.
The SEC had also taken legal action where they sent an enforcement action to Paxos which demanded them to stop issuing BUSD.
As a result of that action, the total market cap of the stable coin had dropped significantly and resulted in $2 billion in losses.
Even Coinbase had commented on the SEC’s actions and stated that stable coins are not considered securities.
Based on this, it is clear that the exchange did not want to delist, but the SEC’s regulatory pressure has left them no choice.
Crypto exchange Coinbase announced today that it will suspend trading for beleaguered stablecoin Binance USD (BUSD) on March 13. The blockchain-based digital dollar, which operates on Ethereum, currently has a market capitalization of $11.1 billion. https://t.co/xpEJgsctHC
— Forbes (@Forbes) February 28, 2023
The decision will apply to Coinbase.com (simple and advanced), Coinbase Pro, Coinbase Exchange and Coinbase Prime, according to the Twitter thread. The exchange added, “Your BUSD funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time.”
A Coinbase spokesperson told Cointelegraph:
“Our determination to suspend trading for BUSD is based on our own internal monitoring and review processes. When reviewing BUSD, we determined that it no longer met our listing standards and will be suspended.”
Binance did not immediately reply to a request for comment.
#Coinbase will suspend trading of #Binance USD (BUSD) starting March 13#BUSD funds will remain accessible, and users will continue to have the ability to withdraw their funds at any time.#Crypto #Cryptos #Bitcoin #CryptoNews pic.twitter.com/We3Ld5CTOV
— OnChain News (@news_onchain) March 1, 2023
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