Crypto markets on edge as U.S. regulatory crackdown on industry intensifies
Digital currency markets are on edge after a flurry of aggressive regulatory actions from U.S. authorities over the past few days.
Bitcoin was slightly higher at $21,826.68 at around 05:31a.m. ET, according to CoinDesk data.
Investors are digesting a number of major regulatory actions in the U.S., as authorities look to rein in the once free-wheeling cryptocurrency industry.
On Monday, the New York State Department of Financial Services told Paxos to stop minting new Binance USD, or BUSD, stablecoins. A stablecoin is a type of digital currency that is pegged to a real-world asset. BUSD is pegged one-to-one with the U.S. dollar. Paxos issues BUSD, the third-largest dollar-pegged cryptocurrency.
Stablecoins are often backed by real-world reserve assets, such as bonds and cash. They are used to trade in and out of different cryptocurrencies, as a trader does not need to convert money back to fiat currencies.
BUSD remained relatively stable and close to its $1 peg after the New York regulator’s orders. Paxos said that BUSD will continue to be redeemable through at least Feb. 2024. People can redeem funds in U.S. dollars or convert BUSD to Paxos’ own stablecoin called Pax Dollar (USDP).
Paxos confirmed that the Securities and Exchange Commission has notified it that the agency could recommend an action that alleges BUSD is a security, and that Paxos should have registered the token offering under federal securities law.
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