Cryptocurrency exchange giant Binance announced that it will officially cease support for the BUSD stablecoin by December 15th. The announcement comes amid growing regulatory pressure on the asset’s issuer Paxos.
In a blog post, Binance advised users to withdraw or convert any BUSD holdings into alternative cryptocurrencies. In addition, it touted conversion to its own FDUSD stablecoin as an option at a 1:1 ratio with no trading fees.
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Paxos faced trouble from the New York Department
The wind-down marks continued fallout from the New York Department of Financial Services ordering Paxos to stop minting BUSD in February over undisclosed concerns.
The exchange will disable withdrawals by December 31st and automatically shift all remaining customer balances into FDUSD without additional fees.
The Binance announcement clarified that BUSD assets can still be deposited and manually swapped for FDUSD until further notice, despite other functionality ending. In addition, the 1:1 conversion ensures stable value is preserved without disruption for customers caught in the shuffle.
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Parallel efforts are underway to shift collateral assets backing the BUSD supply over to FDUSD in the coming weeks.
A separate notification will confirm the completion of that process. Users will be able to redeem leftover BUSD for dollars until at least February 2024 based on Paxos’ continuity pledge. Just this week, the U.S. Commodity Futures Trading Commission filed charges against Binance for offering unregistered crypto derivative products to American customers.