Paxos Trust Company, a blockchain infrastructure platform, has announced a halt to the issuance of new Binance USD (BUSD) stablecoins. The decision was made due to an ongoing investigation by New York regulators.
Effective February 21st, Paxos will discontinue the creation of new BUSD tokens in accordance with instructions from the New York Department of Financial Services (NYDFS).
However, Paxos has reassured its customers that all existing BUSD tokens will continue to be fully backed and redeemable through the Paxos Trust Company until at least February 2024. Customers will still have the option to redeem their funds in U.S. dollars or convert their BUSD tokens to Pax Dollar (USDP), another stablecoin issued by Paxos.
“This action does not impact our ability to continue serving new or existing customers, our continued dedication to grow our staff or fund our business objectives. Paxos remains committed to becoming the global leader in the blockchain tokenization infrastructure […]”
Recently, the NYDFS gave an abrupt order to Paxos Trust to cease the issuance of BUSD on February 13th. This follows a notice issued by the United States Securities and Exchange Commission to Paxos, alleging that BUSD is an unregistered security.