Coinbase to Halt Trading of Binance USD Amid SEC Regulatory Scrutiny
On Monday, Coinbase announced that it would cease trading Binance USD next month, following regulatory scrutiny by the SEC. Starting March 13, Coinbase will no longer facilitate trades of Binance USD (BUSD).
Coinbase does not offer any cryptocurrency trading pairs with BUSD, except for BUSD/USD in some regions, according to a Coinbase update from February 27, 2023. However, the USD pair is not accessible in some locations, including New York and Germany.
According to CoinGecko, Coinbase represents only 0.01% of the total BUSD/USD trading volume. The most prevalent trading pair, BUSD, and bitcoin (BTC) is available only on a few exchanges, including the token’s original home, Binance.
Given the regulatory pressure that BUSD is under, halting trading represents a proactive move from Coinbase’s perspective, according to Timothy Cradle, director of regulatory affairs at Blockchain Intelligence Group. This move by Coinbase follows the issuance of a Wells notice by the SEC to Paxos, alleging that BUSD is a security.
As a result, Paxos has delisted the stablecoin. He predicted that other U.S. exchanges will likely follow suit in the next few weeks.
USDC, which Coinbase launched in 2018 with Circle via the Centre Consortium, is the second-largest stablecoin after tether (USDT) and has not been subject to any public SEC investigation since its inception. According to Circle and Coinbase, neither company has received a Wells notice concerning USDC.