Paxos, the issuer of the $16 billion Binance USD (BUSD) stablecoin, has burned more than $700 million of BUSD tokens since Paxos announced on Monday that it would stop issuing the cryptocurrency amid mounting regulatory pressure, blockchain data shows.
Data from blockchain intelligence firm Nansen shows that a Paxos Treasury crypto wallet transferred $703 million worth of BUSD tokens to a burn address within 27 hours starting Monday morning, essentially removing the coins from circulation.
Paxos Treasury sent the first transaction of $144.5 million worth of BUSD at Monday 13:47 UTC, data from blockchain monitoring tool Etherscan shows – less than two hours after the announcement. Eight more transactions followed in the next 27 hours, worth some $559 million.
BUSD is a dollar-pegged stablecoin backed by short-term treasuries and cash-like assets, so holders can redeem the token 1:1 to a U.S. dollar anytime. U.S.-based fintech firm Paxos issues the token according to regulation from the New York Department of Financial Services, the state’s main financial regulatory agency.
The maneuver is a sign of investors exiting BUSD quickly. The $700 million redemption in a little more than a day represents some 6% of the total coins in circulation. Changpeng “CZ” Zhao, chief executive of Binance, the world’s largest crypto exchange by trading volume, tweeted Monday that BUSD market capitalization “will only decrease over time.”
News broke on Monday morning that the U.S. Securities and Exchange Commission (SEC) had sent a Wells notice to the firm for issuing unregistered securities, signaling an imminent enforcement action from the regulator. Meanwhile, the NYDFS is probing the firm and has ordered Paxos to stop minting new Binance USD (BUSD) tokens.