Binance CEO Reassures Users Amid SEC Probe Against BUSD Issuer Paxos
The recent investigation by the U.S. Securities and Exchange Commission (SEC) into Paxos, the issuer of Binance USD (BUSD), has caused a stir in the crypto community.
However, Binance CEO Changpeng Zhao (CZ) has taken to social media to clarify the situation.
CZ took to Twitter to emphasize that BUSD is issued and redeemed by Paxos and that the funds are safe. He explained that the New York Department of Financial Services (NYDFS) had directed Paxos to stop creating new Binance USD.
The CEO of Binance stated that BUSD is a stablecoin fully owned and managed by Paxos and that the investigation may lead to a reduced amount of BUSD over time. However, Paxos will continue to manage the product and handle redemptions.
According to CZ, the funds are safe and fully backed by reserves in Paxos’ banks. The reserves have undergone multiple audits from various audit firms, he noted.
CZ stated that he does not have any information about the reported SEC vs. Paxos lawsuit, as the case is between the SEC and Paxos, and he is not an expert in the matter.
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However, he said that if BUSD is ruled as a security by the courts in the future, it will have a major impact on the crypto industry and determine its development in that jurisdiction.
Despite the investigation, CZ assured that Binance would continue to support BUSD. However, the exchange may make product adjustments, such as moving away from using BUSD as the primary trading pair. Binance will act following ongoing regulatory uncertainty and review other projects to ensure users are protected from harm.