Stablecoin issuer Paxos Trust Co. has been ordered by the New York Department of Financial Services to end its relationship and stop the issuance of new dollar-pegged BUSD ( BUSD-USD ) tokens starting Feb. 12, it said in a statement dated Monday. The company, which also manages stablecoin pax dollar ( USDP-USD ), noted it will keep supporting BUSD reserves and redeem coins for onboarded customers through at least February 2024. "Paxos also assured the funds are safe," a Binance spokesperson told Seeking Alpha in an emailed statement. "Given the ongoing regulatory uncertainty in certain markets, we will be reviewing other projects in those jurisdictions to ensure our users are insulated from further undue harm." On top of facing scrutiny from the New York regulator, the U.S. Securities and Exchange Commission will potentially bring charges against Paxos over breaching investor protection laws, the Wall Street Journal reported, citing people with knowledge on the matter. BUSD is the world's third largest stablecoin with a market cap of $16B, according to CoinMarketCap data . Each token is backed one-to-one with U.S. dollars held in reserves. Binance coin ( BNB-USD ), the native token of crypto exchange Binance, was one of the biggest percentage losers in Monday morning's risk-off trading, falling 5.9% to $291.65 as of shortly before 10 a.m. ET. Last week, (Feb. 10) PayPal ( PYPL ) reportedly delayed its stablecoin work as Paxos faces NYDFS probe.
