Key Insights
- Binance to end all support for its BUSD stablecoin by Dec 15th after issuer Paxos halted minting
- Users advised to withdraw or convert BUSD holdings before Dec 31st when withdrawals will be disabled
- Follows $4.3B settlement between Binance/CZ and U.S. agencies, plus regulators’ suggestion that BUSD was unregistered security
NEW YORK — Leading cryptocurrency exchange Binance moved to fully wind down issuance and support of its embattled stablecoin BUSD this week, announcing customers have until December 15th to convert holdings before automatic conversion kicks in 2024.
In a notice Wednesday, Binance advised users to withdraw or swap existing Binance USD tokens ahead of the deadline. Come December 31st, the exchange will disable BUSD withdrawals altogether with balances shifted into a different stablecoin for eligible users.
In accordance with past communications, #Binance will cease support for BUSD products starting on December 15, 2023.
Users may trade or convert their BUSD balances for $FDUSD at zero trading fees.
Full details here 👇https://t.co/usRi09uOhi
— Binance (@binance) November 29, 2023
The update comes after BUSD’s issuer Paxos ceased minting new tokens following recent regulatory crackdowns, choking off further growth of what was once among the largest fiat currency-pegged cryptos.
U.S. agencies suggested BUSD constituted an unregistered security. Last week, Binance and founder Changpeng Zhao agreed to pay $4.3 billion in fines related to money laundering violations, with Zhao stepping down as CEO.
The move to delist BUSD marks the continuing fall from grace for a formerly prominent dollar-backed stablecoin that commanded a $20 billion-plus market capitalization last November.
Its diminished status underscored wider stablecoin market turmoil after the collapse of algorithmic stablecoin TerraUSD. While BUSD avoided the same fate, its eroding foundations served as another reminder of the precarious nature underpinning digital assets.
The looming termination of BUSD by Binance signifies a symbolic changing of the guard to new stablecoin variants like FDUSD. But the former giant now joins the ranks of cautionary tales on the risks of outsized crypto industry ambitions exceeding cautious regulatory realities.