New York Department of Financial Services explains ban: Unauthorized issuance of Binance-Peg BUSD, not issued by Paxos
The issuer of the stablecoin BUSD, Paxos, has been banned from issuing by the New York Department of Financial Services (NYDFS). NYDFS stated that this is because Paxos is unable to manage this token with a "safe" approach.
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Binance-Peg BUSD Controversy!
Furthermore, according to the announcement issued by NYDFS, the key issue with Paxos seems to be that NYDFS only authorized Paxos to issue BUSD on the Ethereum blockchain and did not authorize the issuance of Binance-Peg BUSD on other blockchains. Additionally, Binance-Peg BUSD is not issued by Paxos.
According to the article on the Binance official website, to expand the utility of BUSD to other blockchains, Binance offers a packaged version of the stablecoin called Binance-Peg BUSD, designed to track the value of the original ERC-20 BUSD at a 1:1 ratio. However, this action was not approved by NYDFS.
For a full understanding of the BUSD incident: BUSD Event Summary | Is the Stablecoin a Security? Regulatory Demands to Halt Issuance? Binance Zhao Changpeng Responds? Any Connection to USDC?
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