Cryptocurrency exchange Binance has announced it will cease support for all Binance USD (BUSD) products starting from December 15, following Paxos’ temporary halt in minting new tokens.
In the announcement on November 29, Binance stated that users should withdraw or convert their existing BUSD holdings on the exchange to other assets before December 15. Starting on December 31, Binance will disable BUSD withdrawals. At that point, current balances will automatically be converted into First Digital USD (FDUSD) for certain users.
This move is the latest in Binance’s efforts to wind down its services related to its native stablecoin. The exchange announced plans to gradually phase out BUSD support by February 2024, beginning with the suspension of borrowing and lending services for the stablecoin in October.
In February, the U.S. Securities and Exchange Commission (SEC) alleged that BUSD was an unregistered security in a Wells Notice sent to Paxos, the company that issues the stablecoin. The New York Department of Financial Services also ordered Paxos to temporarily halt BUSD issuance.
On November 21, the U.S. government announced that it had reached an agreement with Binance and former CEO Changpeng Zhao, requiring them to pay $4.3 billion. Zhao resigned as CEO as part of the settlement, and Richard Teng, who heads the exchange’s regional markets, will replace him.
Prior to August, BUSD was one of the largest stablecoins by market capitalization, reaching an all-time high of over $23.3 billion in November 2022. At the time of writing, the market capitalization of the stablecoin is approximately $1.7 billion, a decrease of over 92% in the past 12 months.