• SEC ruling on BUSD labels it an „unregistered security“
• Truflation CEO Stefan Rust believes there is a political angle to the action
• Binance announced they will continue to support BUSD, but could look at alternatives as a new main trading pair

SEC Ruling on BUSD

The New York Department of Financial Services (NYDFS) has recently ordered for BUSD issuer Paxos to cease issuing new tokens. The US Securities and Exchange Commission (SEC) has also labeled BUSD an “unregistered security”. This ruling has received criticism from Truflation CEO Stefan Rust who believes that it makes no sense legally and may have been politically influenced.

Binance’s Response

In response, leading cryptocurrency exchange Binance announced that they would continue supporting the Binance USD (BUSD) stablecoin, however they could look at alternatives as a new main trading pair. They also stated that their relationship with Paxos would be terminated due to their compliance with NYDFS order.

Truflation CEO’s Comments

Truflation CEO Stefan Rust claims that the SEC’s action against Paxos does not make sense – legally and looks like a highly politically motivated process. He suggested that this could be due to the decreasing trading volumes of USDC which is favored by US institutions like BlackRock whose balance sheet is worth $10 trillion.

Paxos‘ Response

Paxos – the US-regulated issuer of the stablecoin – announced their compliance with NYDFS order and termination of relationship with Binance but maintained its stance that BUSD is not a security. They further declared their intent to litigate against SEC if possible.

Conclusion

The SEC ruling on labelling BUSD as “unregistered security” received criticism from Truflation CEO Stefan Rust who believes it makes no sense legally and may have been politically influenced. In response, cryptocurrency exchange giant Binance announced their continued support for the stablecoin while looking into alternatives as main trading pairs. Furthermore, Paxos declared its intention to litigate against SEC should they get the chance while maintaining its stance of non-security status for the token.