Due to pressure from regulators, Paxos burns $700 million USD on Binance in just 27 hours.
Since Monday, the number of BUSD has dropped by more than 6%.
Since Monday, Paxos, the company that created the $16 billion stable coin Binance USD (BUSD), has burned more than $700 million worth of BUSD tokens.
Blockchain data shows that was when Paxos said it would stop making the cryptocurrency because of growing pressure from regulators.
Nansen, a blockchain intelligence company, has found that a Paxos Treasury crypto wallet sent $703 million worth of BUSD tokens to a “burn address” in just 27 hours, starting on Monday morning. This took the coins out of circulation for all practical purposes.
Data from the blockchain monitoring tool Etherscan shows that Paxos Treasury sent the first transaction of $144.5 million worth of BUSD at 13:47 UTC on Monday. This was less than two hours after the announcement. In the next 27 hours, there were eight more deals worth about $559 million.
BUSD is a dollar-pegged stablecoin that is backed by short-term treasuries and other cash-like assets. This means that anyone who owns a BUSD token can exchange it for a dollar at any time. The token is issued by the U.S.-based fintech company Paxos in accordance with the rules of the New York Department of Financial Services, which is the state’s main financial regulator.
The move shows that investors are getting out of the BUSD quickly. In a little more than a day, $700 million worth of coins were redeemed. This is about 6% of all the coins in circulation. Changpeng Zhao, CEO of Binance, the world’s largest cryptocurrency exchange by trading volume, tweeted on Monday that BUSD market capitalization “will only go down over time.”
On Monday morning, it was reported that the U.S. Securities and Exchange Commission (SEC) had sent a Wells notice to the firm for selling unregistered securities, which means that the regulator is about to take action.
The New York Department of Financial Services is currently looking into the company and has told Paxos to stop creating new Binance USD (BUSD) tokens.