The New York State Department of Financial Services (NYDFS) has ordered Paxos Trust, a company that issues stablecoins, to suspend minting binance USD (BUSD), citing several "unresolved issues" related to the firm's oversight of its relationship with crypto exchange Binance.
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The NYDFS pointed out in a press release on Monday it had authorized Paxos to issue BUSD only on the Ethereum blockchain, while Binance's version of the stablecoin issued on BNB Chain (formerly Binance Smart Chain) lacks this authorization.
"The Department has not authorized Binance-Peg BUSD on any blockchain, and Binance-Peg BUSD is not issued by Paxos," the regulator said.
Paxos acknowledged it would cease minting new BUSD tokens starting from February 21, adding that the move would "end its relationship with Binance for the branded stablecoin BUSD." Binance CEO, Changpeng Zhao, wrote in a Twitter thread he "doesn't have information" about the alleged lawsuit between the US Securities and Exchange Commission and Paxos.
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