• Paxos, the blockchain and tokenization platform, has announced it is terminating its relationship with global cryptocurrency exchange Binance.
• The company has ended its partnership with Binance with respect to the branding of the BUSD stablecoin.
• The company will also stop minting new BUSD tokens as it looks to comply with an order from the New York Department of Financial Services (NYDFS).
Paxos Terminates Relationship With Binance
Paxos, a blockchain and tokenization platform that issues the stablecoin Binance USD (BUSD), recently announced they are terminating their relationship with global cryptocurrency exchange Binance. This means that Paxos will no longer use the Binance brand for the stablecoin.
Reason for Termination
The termination comes after an order from the New York Department of Financial Services (NYDFS) directed Paxos to cease issuing new BUSD tokens. Additionally, there are reports that suggest that the SEC is suing Paxos for issuing unregistered securities which sparked questions in regards to how this applies to a stablecoin.
Halting Minting of New Tokens
In ending their relationship with Binance, Paxos also announced they will stop minting new BUSD tokens effective February 21st 2023 in order to comply with NYDFS’s order. Nevertheless, existing tokens remain fully-backed and redeemable via Paxos until at least February 2024.
Binance CEO’s Statement
On Monday, Changpeng Zhao, CEO of Binance said that the crypto exchange will continue to support the BUSD token despite their parting ways with Paxos. Furthermore, he mentioned they do foresee users migrating to other stablecoins over time and plan on making product adjustments such as moving away from using BUSD as their main pair for trading.
Overall, despite ending their relationship with one another both parties still wish each other well and agree customers should still be able to access both services without issue or disruption going forward.