Coinbase, has announced that it will suspend trading of Binance USD (BUSD) on March 13, 2023. The suspension will apply to Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime. The announcement follows the exchange’s internal review of the stablecoin, which apparently concluded that it did not meet Coinbase’s listing standards. However, customers will still be able to access their BUSD funds and withdraw them at any time.

The announcement along with the SEC’s recent crackdown on Stablecoins has means that the total marketcap of BUSD as suffered considerably, shrinking by £6 billion in just 2 weeks. However, zooming out to a 3 month chart shows that BUSD Mcap has basically halved during this time:

The move comes after the New York Department of Financial Services (NYDFS) ordered Paxos Trust, a New York-based digital asset exchange, to stop minting new BUSD as of February 21, citing unresolved issues related to Paxos’ oversight of its relationship with Binance. Binance, which issued its own form of BUSD known as Binance-Peg BUSD on its in-house Binance Smart Chain, admitted that its BUSD was not always backed by a sufficient quantity of reserve assets to maintain its 1:1 ratio with the U.S. dollar. The NYDFS said Paxos had violated its obligation to conduct tailored, periodic risk assessments and due diligence refreshes of Binance and Paxos-issued BUSD customers to prevent bad actors from using the platform.

Paxos was also sent a Wells notice by the U.S. Securities and Exchange Commission (SEC) indicating the SEC’s belief that BUSD was an unregistered security. SEC chairman Gary Gensler has become increasingly interested in taking action against crypto entities that trade in tokens and staking programs without registering them as securities. Last week, Last week, Golden Gary Gensler said that “everything other than bitcoin” qualified as a security.

Coinbase has been pushing back against Gensler’s regulatory approach, which poses an existential threat to its current economic model, heavily reliant on the interest generated from holding custody of USDC stablecoins on behalf of customers. The exchange is also dealing with its own potential SEC action after the agency concluded that a number of tokens listed on the exchange qualified as unregistered securities.

We’ll have to see how the situation unfolds as the SEC and Golden Gary Gensler have been looking for new and creative ways to screw over the industry. Naturally, all scammers, fraudsters, countless instances of insider trading and market manipulation and the 22,000 useless shitcoins have already been dealt with so it’s only normal we work our way up the agenda and tackle the stablecoins and staking.

I hope all the lights turn red as you approach, Gary.

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