Binance, a leading cryptocurrency exchange, has disclosed plans to discontinue support for the BUSD stablecoin by December 15th. The decision comes amidst intensified regulatory scrutiny targeting Paxos, the issuer of the BUSD asset.
In an official blog post, Binance urged its users to either withdraw their BUSD holdings or convert them into alternative cryptocurrencies. It notably highlighted the option of seamlessly converting to its proprietary FDUSD stablecoin at a 1:1 ratio, exempt from any trading fees.
This move reflects ongoing repercussions following the New York Department of Financial Services’ directive to halt BUSD minting by Paxos in February, citing undisclosed concerns.
By December 31st, Binance will halt BUSD withdrawals and automatically transition the remaining customer balances into FDUSD without imposing additional charges.
Clarifying its stance, the announcement affirmed that BUSD deposits remain open and can be manually exchanged for FDUSD until further notice, ensuring that customers can maintain stable asset values during this transition phase.
Simultaneously, active initiatives are underway to migrate collateral assets supporting the BUSD supply to FDUSD in the upcoming weeks. A subsequent notification will confirm the successful completion of this process.
Furthermore, users can redeem any remaining BUSD for dollars until at least February 2024, as Paxos has committed to ensuring continuity. However, Binance recently faced legal action from the U.S. Commodity Futures Trading Commission for allegedly providing unregistered crypto derivative products to American customers.