Coinbase, a cryptocurrency exchange, revealed on Monday that it would suspend trading for Binance USD (BUSD) on March 13, 2023, at about 12 p.m. ET. This decision was reached in response to Paxos’ disclosure that the company was instructed to stop issuing stablecoin pegged to the US dollar by the New York State Department of Financial Services.
“We regularly monitor the assets on our exchange to ensure they meet our listing standards,” the American exchange asserted in a Tweet. “Based on our most recent reviews, Coinbase will suspend trading for Binance USD (BUSD) on March 13, 2023, on or around 12 pm ET.”
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.
— Coinbase Assets (@CoinbaseAssets) February 27, 2023
According to the announcement, the suspension will cover Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime platforms. However, customers can still access and withdraw their BUSD holdings after March 13.
They have not made the precise cause of the delisting public, but Coinbase showed that they constantly checked to see if the assets on the exchange complied with the listing requirements and that they have now come to the conclusion that BUSD does not.
A number of cryptocurrency enthusiasts weighed in on Coinbase’s decision to suspend BUSD, with some criticizing the exchange’s choice of timing for the stablecoin suspension.
“So at what point did BUSD suddenly fail to meet your listing standards, and which standard did it fail to meet?” a person wrote in response to the Coinbase tweet.
BUSD Faces Increased Scrutiny
Binance and BUSD are facing difficult times because of the increasing regulatory scrutiny of stablecoin issuer Paxos. The U.S. Securities and Exchange Commission (SEC) allegedly delivered Paxos a Wells Notice over BUSD on February 13, saying that it classified BUSD as an unregistered security.
The stablecoin issuer, however, stated that it is having “constructive discussions” with the regulator despite categorically disagreeing with the SEC’s classification. It also severed cooperation with Binance following the suspension of BUSD stablecoin issuance.
According to data from CoinMarketCap, BUSD is still the third-largest stablecoin by market capitalization, with a total value of about $10 billion, only below Tether’s USDT and Circle’s USDC stablecoins.
It is presently ranked tenth after Paxos burned billions of BUSD in an effort to remove the tokens from circulation. BUSD has shed about 20% of its circulating supply since reports of the SEC’s plan to sue first surfaced on Feb. 12.