Binance coin, or BNB, slumped 5% after the New York Department of Financial Services ordered Paxos Trust to stop creating more of its BUSD token, a Binance spokesman said on Monday. BUSD is a stablecoin backed by the U.S. dollar, which was created in 2019 in a partnership between crypto platform Binance and blockchain company Paxos Trust, with approval from the New York Department of Financial Services. BNB coin is the native token on the Binance exchange.
On Monday, a Binance spokesman said in an emailed statement that it had been informed by Paxos Trust that the New York Department of Financial Services has been told to cease minting new BUSD tokens. The BUSD token was trading just below parity on Monday, according to Coinmarketcap. Binance maintained that BUSD is a stablecoin “wholly owned and managed” by Paxos. “As a result, BUSD market cap will only decrease over time. Paxos will continue to service the product, manage redemptions, and will follow-up with additional information as required. Paxos also assured the funds are safe, and fully covered by reserves in their banks,” Binance said. “Given the ongoing regulatory uncertainty in certain markets, we will be reviewing other projects in those jurisdictions to ensure our users are insulated from further …