Thursday, March 30, 2023

Binance USD market cap falls below $10B amid rising regulatory concerns


Binance USD (BUSD) market cap has fallen below $10 billion for the primary time in virtually two years amid a United States regulatory crackdown on its token issuer and a deliberate delisting from a serious crypto change.

BUSD’s marketcap has been on a steep downward trajectory since its all-time excessive (ATH) market cap of $23.49 billion on Nov. 15, just some days after the shock collapse of FTX.

As of immediately, the stablecoin’s marketcap has fallen to $9.66 billion — ranges not seen since Jun. 29, 2021.

Market cap of Binance USD (BUSD) during the last 12 months. Source: CoinGecko.

Most just lately, BUSD has been the topic of a possible lawsuit against Paxos by the United States Securities Exchange Commission (SEC) on Feb. 12 over a potential violation of investor safety legal guidelines. Since then SEC, $6.65 billion has been shaved off BUSD’s market cap.

Paxos was additionally ordered by the New York District of Financial Services (NYDFS) to stop minting and issuing BUSD on Feb. 12 too, which is more likely to have contributed to the stablecoin’s market cap fall.

Earlier this week, cryptocurrency exchange Coinbase introduced it will likely be delisting BUSD from its change on Mar. 13 as a result of the stablecoin “no longer met our listing standards,” a Coinbase spokesman advised Cointelegraph.

The wider crypto market has additionally seen a fall in market cap, with many pointing to the current controversy surrounding Silvergate Bank with the late filing of its annual 10-K financial report on Mar. 1.

Related: Unstablecoins: Depegging, bank runs and other risks loom

Upon its launch in September 2019, the Binance-branded stablecoin rapidly surged to develop into the third largest stablecoin behind Tether (USDT) and USD Coin (USDC).

The stablecoin is at present in tenth place when it comes to market cap throughout all cryptocurrencies. The subsequent crypto token on the checklist is Solana (SOL) with $7.98 billion in market cap.

The largest stablecoins by market cap. Source: CoinGecko.

Interestingly, Binance CEO Changpeng ‘CZ’ Zhao said in a Feb. 14 Twitter Spaces that he never thought very highly of the Binance stablecoin project, including that he thought it “may fail” when it first rolled out.

To account for the autumn in demand for BUSD, Binance just lately minted nearly $50 million worth of TrueUSD (TUSD) because the cryptocurrency change appears to be like to diversify its stablecoin holdings.