Paxos, the issuer of the Binance stablecoin BUSD has announced that it will no longer mint the dollar-pegged asset from Feb. 21.

In a statement on Feb. 13, the company said:

“Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws.”

As a result, panic has set in once again, and redemptions of BUSD have skyrocketed over the past few hours.

Paxos stated that its BUSD reserves are fully backed 1:1 to the dollar, but that hasn’t prevented the exodus from the stablecoin. Industry analysts have labeled it as a clandestine attack on Binance.

The SEC could choose any stablecoin to attack and went with BUSD, even though Paxos is fully regulated and compliant.

The BUSD run has caused a 2.2% decline in supply in just a few hours. Before the announcement, there was $16.15 billion BUSD circulating, but over the past 12 hours, that has shrunk to $15.79. This means that around $360 million has been redeemed.

(By Martin Young)

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