Outflows of BUSD, a Binance stablecoin pegged to the US dollar have steeply increased following CFTC’s lawsuit alleging “Willful Evasion” of U.S. regulations and the sale of unregistered crypto derivative products.
Over $500 million of the asset has been removed from the exchange in 24 hours since the lawsuit went public, but this is still less than the February SEC crackdown on BUSD issuer Paxos, which resulted in over $2 billion in BUSD outflows.
After Paxos was told by US regulators to stop minting BUSD, the exchange is reportedly converting its BUSD holdings in the Secure Asset Fund for Users [SAFU] to TUSD and USDT.
The trading platform recently announced the addition of XRP, Solana, Matic, SSV, Lido DAO, and Optimism as additional TUSD trading pairs. The blog stated that trading them can begin on March 29 at 08:00 UTC.
Even though the stablecoin backed by Justin Sun only has a $2 billion market cap, Binance’s preference for it has sparked discussions in the crypto community.
“It might be due to the fact that Binance was preparing for the transition from BUSD to an alternative stablecoin such as TUSD or USDC,” CryptoQuant head of marketing Hochan Chung told media source in a Telegram message.
“Also the changes in Binance’s exchange reserves of BTC, ETH, and other stablecoins are not notably significant. Only the BNB price has been damaged [down 5.78% in the past 24 hours] from the issue,” Chung added.
Data from Nansen revealed that the trading exchange holds over $7 billion in BUSD.
BUSD Is A Commodity- CFTC’s Complaint
As reported by TronWeekly, Binance was the subject of a complaint filed by the Commodity Futures Trading Commission [CFTC] for violating federal regulations.
C.Z dismissed the CFTC’s civil lawsuit as an ”incomplete recitation of facts” and called it unexpected after cooperating with the agency for more than two years. He also assured a full response to the lawsuit in the near future.
As per the lawsuit, CFTC considers BTC, ETH, LTC, and BUSD as commodities while the SEC labeled these as security, reflecting regulators’ lack of clarity over the crypto assets classification.
Meanwhile, the filing has sent a panic wave in the crypto markets, as the market rally stalled at the $1.2 trillion level.
