Investors pull $2.5B in days from Binance’s stablecoin on regulatory scrutiny
SINGAPORE – About $2.5 billion flowed out from Binance’s stablecoin this week, Binance’s CEO said on Twitter, after U.S. regulators turned their sights on the cryptocurrency.
Most of the money has moved from Binance USD into Tether, another so-called stablecoin where tokens have a $1 value, Binance boss Changpeng Zhao said on Twitter. “Landscape is shifting,” he said.
Stablecoins are used for trading between crypto tokens and between crypto and traditional assets. Binance USD is the third-biggest stablecoin behind Tether and USD Coin.
Tether’s market capitalization – a measure of the amount of money held in Tether – is up about $2 billion this week according to analytics site coinmarketcap.com.
On Monday the New York Department of Financial Services said it ordered the firm behind Binance USD, Paxos Trust Company, to stop minting the tokens. Paxos said it was also told by the U.S. Securities and Exchange Commission that the firm, which is based in New York, should have registered the stablecoin product as a security.
Binance’s native token, Binance Coin, fell on the news but has since recovered and was last steady at $306.96.
Reuters reported on Thursday that Binance, a cryptocurrency exchange, had secret access to a bank account belonging to its purportedly independent U.S. partner and transferred $400 million to a trading firm managed by Zhao.
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