The outflow occurred against the backdrop of demands from the New York State Department of Financial Services (NYDFS) to stop issuing Binance USD stablecoins and became the largest since November 24, 2022, when assets worth $1 billion were withdrawn from the exchange. Over the past 24 hours, the capitalization of BUSD has decreased by $400 million.
Binance USD (BUSD) is ranked third among stablecoins, according to CoinGecko data as of February 14th. On Monday, February 13, the NYDFS requested Paxos Trust to stop issuing new BUSD due to security breaches.
Paxos Trust on Monday evening said it “strongly disagrees” with the department's designation of BUSD as a security.
Bloomberg reports that a few months before the imposition of a ban on the issuance of Paxos-Binance stablecoins, Circle filed a complaint against a competitor with regulatory authorities.
Previously, the Federal Reserve Bank (FRB) of New York published a study titled “The Implications of Digital Assets for Financial Stability,” which suggests that the rise in popularity of stablecoins is a threat, as it increases risks to the financial system.