On March 17, cryptocurrency exchange Binance announced that it will aver sostituito i Binance USD (BUSD) nel suo Secure Asset Fund for Users (SAFU) con TrueUSD (TUSD) e Tether (USDT). This decision was made in response to Paxos’ decision to stop minting new BUSDs, which led to a decline in the market capitalization of the asset:
“Since Paxos will no longer mint new BUSD, Binance has replaced the SAFU fund’s BUSD with TUSD and USDT.
This change will not impact users and funds will remain in publicly verifiable addresses.
I fondi sono SAFU.”
As Paxos will no longer be minting new BUSD, #Binance has swapped the BUSD in the SAFU Fund for TUSD & USDT.
This change will have no impact on users, and the funds remain on publicly verifiable addresses.
Funds are SAFU.https://t.co/edLVgpdCUQ
— Binance (@binance) March 17, 2023
The exchange added that it will closely monitor the SAFU fund to ensure it remains sufficiently capitalized. It could also enter funds manually if needed.
SAFU is an emergency insurance fund established by Binance in July 2018, in order to protect user funds in the event of a security breach or other unforeseen event. Binance commits a percentage of the trading fees to grow the fund: on January 29, 2022, it reached a value of one billion dollars. Previously SAFU wallets contained BNB (BNB), Bitcoin (BTC) and Binance USD; this stablecoin has now been replaced with TUSD and USDT.
Paxos Trust Company announced that it would stop issuing new BUSD effective February 21stin accordance with guidance from the New York Department of Financial Services.
Just days after news broke that US regulators were investigating Paxos and BUSD, Binance minted nearly $50 million in TUSD. The transaction took place on February 16; two days earlier CEO Chanpeng Zhao had mentioned that the company allegedly tried to “diversification” its stablecoin holdings.
The US Securities and Exchange Commission has also taken legal action against BUSD, but not against Pax Dollar (USDP) or Pax Gold (PAXG), i.e. the Paxos stablecoin pegged to the value of gold. The community therefore wonders if the real problem was the stablecoin… or Binance:
“Excellent observation. Paxos has been targeted specifically for BUSD, but not for its Pax Dollar. Let’s look at the big picture: FTX has collapsed, and now suddenly regulators are picking on Binance.
It’s almost as if a Binance co-conspirator is tipping them off.”
This is an excellent point. Paxos has been specifically targeted for BUSD, but not their own Pax dollar.
Look at the bigger picture. FTX collapsed, & now suddenly the regulators are coming after Binance.
It’s almost as if a co-conspirator of Binance is informing on them. https://t.co/FhkrntttlK
— Cryptohippo (@cryptohippo65) February 13, 2023
