• Circle USDC filed a regulatory complaint against Binance alleging mismanagement of token reserves in 2022.
• The case is related to the SEC’s current investigation of the BUSD stablecoin issuer Paxos.
• The New York State Department of Financial Services ordered Paxos to terminate its partnership with Binance and stop minting BUSD.
Circle USDC Files Regulatory Complaint Against Binance
Circle USDC has filed a regulatory complaint against crypto exchange Binance, alleging mismanagement of token reserves in 2022. This case relates to the ongoing investigations by the Securities and Exchange Commission (SEC) into the issuer of the BUSD stablecoin, Paxos.
Binance Allegedly Did Not Store Enough Crypto In Reserve
Circle alerted the New York State Department of Financial Services last autumn to issues its team had surfaced in blockchain data which showed that Binance did not store enough crypto in reserve to support tokens it had issued.
Regulator Orders Termination Of Partnership Between Paxos And Binance
The regulator subsequently ordered Paxos to terminate its partnership with Binance and cease minting BUSD stablecoin on Monday, citing „several unresolved issues related to Paxos‘ oversight of its relationship“ concerning the cryptocurrency asset.
Implications For Crypto Industry
This case highlights how closely regulated cryptocurrencies are becoming, as well as how exchanges must adhere strictly to financial regulations or face severe consequences such as fines or even closure. It also serves as a reminder for investors that they should always do their due diligence before investing in any cryptocurrency asset or trading platform.
The regulatory complaint filed by Circle USDC against crypto exchange giant, Binance, points towards stricter crypto regulations being enforced globally and serves as an important reminder that investors should always conduct extensive research before investing in any cryptocurrency asset or trading platform.