A member of the Dogecoin Foundation’s board, known on Twitter as Mishaboar, has expressed concerns over the recent conflict surrounding Paxos and Binance USD (BUSD) stablecoin. Mishaboar stated that Binance CEO Changpeng Zhao attempted to downplay BUSD’s significance in the exchange’s ecosystem, despite being the official stablecoin of one of the world’s leading cryptocurrency centralized finance (CeFi) platforms.
Mishaboar believes that Binance and BUSD are inseparable brands in the eyes of ordinary members of the crypto community. Despite the stablecoin being issued by Paxos, Binance has been aggressively promoting BUSD on its platform since its launch, delisting several stablecoins, including its direct competitor Circle’s USD Coin. Last year, Binance removed these assets from the exchange and automatically converted user balances into BUSD.
According to Mishaboar, the Securities and Exchange Commission’s (SEC) intervention was expected due to Binance’s aggressive policy, particularly after Circle’s complaint about the lack of Binance reserves to support BUSD’s stablecoin pegging to the dollar.
In conclusion, Mishaboar urged the crypto community to exercise caution and avoid long-term investments in stablecoins due to the additional risks they pose, including the potential for liquidation of the issuing company and changes in regulatory rules. Additionally, Mishaboar recommended that investors remember the phrase “not your keys, not your assets” and try not to accumulate excessive funds on centralized exchanges.
Recently, about $1 billion in assets were withdrawn from Paxos due to NYDFS demands to stop issuing BUSD, resulting in the largest decrease in BUSD capitalization since November 24, 2022, within the past 24 hours.