SEC Moves Trigger Large-Scale Withdrawals from Binance, BUSD Deposits Skyrocket
• The Securities and Exchange Commission (SEC) has recently taken legal action against BUSD issuer Paxos, resulting in the halt of minting BUSD coins.
• CryptoQuant has observed a large-scale withdrawal from Binance and an increase in BUSD deposits to various Paxos deposit addresses.
• Andrew Thurman estimates that the total amount of BUSD burned this week could reach into the billions.
SEC’s Action Against Paxos
The Securities and Exchange Commission (SEC) has taken aim at the stablecoin’s issuer, Paxos, for allegedly violating securities laws. As a result of the SEC’s move, Paxos announced that it would halt the minting of BUSD.
BUSD Supply Shrinks
Andrew Thurman, a researcher from Nansen, noted that various Paxos deposit addresses saw a „huge uptick“ in deposits on Monday leading to a significant amount of BUSD burning with a volume of more than $275 million. He estimated that this figure could rise into the billions by the end of the week.
BUSD Inflow on CEXes Rises
CryptoQuant reported an upward trend in the amount of BUSD deposited on centralized exchanges with over $200 million worth being deposited on multiple addresses following SEC’s notice against Paxos. Additionally, CryptoQuant also revealed transfer of approximately 3,500 BTC away from Binance due to SEC’s notice.
Large-Scale Withdrawals from Binance
The news regarding SEC’s move against Paxos resulted in large-scale withdrawals from Binance as investors moved their funds to other exchanges or wallets for safety reasons which are expected to continue until legal clarity is provided by PAXOS or any regulatory body involved.
It remains unclear how long this situation will last as no official statement has been released by either PAXOS or SEC yet but one thing is certain: This dispute will have far reaching implications for both PAXOS and its customers including those who use its products such as Binance USD (BUSD). It remains to be seen how quickly these two parties can come up with a resolution before major losses start taking place due to prolonged uncertainty over trading platforms like binance using $BUSD as their primary currency source.