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• The CEO of Truflation, Stefan Rust, believes the SEC’s ruling about BUSD being a security has no sense legally.
• Paxos was ordered to stop minting new BUSD by the New York Department of Financial Services (NYDFS).
• Rust claims that this process is politically influenced due to BlackRock’s $10 trillion balance sheet and dwindling USDC trading volumes compared to USDT and BUSD.
SEC Ruling on BUSD
The US Securities and Exchange Commission (SEC) recently issued an order for Paxos, the issuer of the stablecoin BUSD, to cease issuing new tokens. This decision has been met with criticism from Stefan Rust, CEO of Truflation and former CEO of Bitcoin.com, who believes that it makes no sense legally.
Rust goes on to suggest that there may be political factors at play here – namely, the fact that trading volumes of USDC – which is favored by institutions like BlackRock – have been declining in comparison to USDT and BUSD. He suggests that this could be influencing the SEC’s decision-making process.
In response to the NYDFS order, Paxos announced it would comply but also said it would terminate its relationship with Binance. The company maintained that BUSD is not a security and noted that it would litigate against the SEC if necessary.
Binance Continues Support
Despite this news, Binance stated on Monday that it would continue supporting BUSD as a main trading pair but did not rule out looking into alternatives.
It remains to be seen whether or not Rust’s suspicions of political influence are accurate, but either way it appears as though Paxos will have an uphill battle in trying to convince regulators otherwise when it comes to their stance on BUSD being classified as an „unregistered security“.