Miguel Lopez The cryptocurrency exchange Coinbase has recently announced it will delist the asset BUSD, which is backed by Paxos and pegged to the U.S. dollar. This decision comes after the New York State Department of Financial Services (NYDFS) requested that Paxos suspend issuance of the asset. While this move might seem sudden, it’s actually part of a larger regulatory crackdown that is aimed at making sure crypto assets are compliant with existing regulations. In this article, we’ll cover what exactly led up to this news and explore how the crypto community is reacting.
Coinbase Suspends Trading of BUSD Due To Recent Regulatory Changes
Coinbase recently announced on Feb. 27, 2023 that it will suspend trading of Binance USD (BUSD) following a recent regulatory crackdown by the New York Department of Financial Services (NYDFS). According to Coinbase’s statement, their decision to suspend BUSD trading was due to their need to “ensure [it] meets its listing standards” and as such, trading of BUSD will be suspended on March 13, 2023.
BUSD is the 11th largest cryptocurrency by valuation and according to a report from The Block, it has seen a rapid rise in market capitalization over the last six months. Multiple industry sources speculate Coinbase’s suspension of BUSD trading is due to recent changes in the NYDFS regulations that require exchanges to follow more stringent compliance protocols.
Although Coinbase has not officially released an explanation for why they are suspending trading of BUSD, they have stated that they “take compliance seriously” and are “working closely with the NYDFS and other regulators about our business activities”. Furthermore, Coinbase has said that they will “continue to monitor developments in the industry” and may decide to reinstate BUSD in the future if it can meet their requirements.
This is not the first time Coinbase has taken regulatory action against certain cryptocurrencies. Last year, they delisted ZRX, BCH-ABC, and several other altcoins due to their belief that these tokens did not “meet requirements for listing on our platform”. This demonstrates Coinbase’s commitment to ensuring its customers are able to access high-quality digital assets and underscores their desire to remain compliant with all applicable regulations.
It is still unclear what this regulation means for existing coin holders or how current markets will be impacted. However, it is clear that Coinbase is taking steps to ensure compliance with all relevant regulations and protect its customers from any potential risks associated with volatile digital assets. Only time will tell if these measures have any lasting effect on the overall cryptocurrency market or if this suspension will be reversed in the near future.
Coinbase’s decision to suspend trading of BUSD is a direct result of recent regulatory changes, and it has caused many investors to rethink their strategies. Despite the disruption, it’s clear that these regulators are dedicated to making sure that the cryptocurrency markets are held to a higher standard of transparency and accountability. Moving forward, Coinbase and other platforms must remain vigilant in adhering to the latest regulations to ensure a secure and compliant trading environment.
