PAXOS IS GUILTY? NEW YORK REGULATOR SCRUTINIZING STABLECOIN ISSUER-PAXOS

The New York Department of Financial Services (NYDFS) is currently investigating stablecoin issuer Paxos; The full scope of the investigation is unclear. Paxos’ stablecoins include the Pax dollar (USDP) and Binance USD (BUSD), a Binance-branded stablecoin offered through a white-label service.



This investigation has created quite a stir in for Binance has endured some $831 million of net outflows in the past 24 hours, Nansen data shows. Monday’s outflow is the largest in a day since November.

According to blockchain intelligence firm Nansen’s data, Investors appear to be spooked by regulatory crackdown on the Paxos-issued Binance USD (BUSD) stablecoin and so are reducing their holdings on the platform.

The Blockchain data also shows users withdrew some $2.8 billion of digital assets in the last 24 hours, outweighing the $2 billion of deposits during the same period. The withdrawals have followed the New York Department of Financial Services ordering Paxos on Monday to halt issuing the $16 billion BUSD stablecoin and a looming enforcement action by the U.S. Securities and Exchange Commission (SEC). Issued under the Binance brand, BUSD is the third-largest stablecoin and accounts for 35% of all Binance trading volume.

Yesterday’s activity also marked the largest daily net outflows from Binance since November which surpassed December outflows when the exchange’s lackluster report about its reserves alarmed investors as per the data dashboard by crypto investment product firm 21Shares.