Binance BUSD Drops $1 Billion in Market Cap, Falls to Fourth Among Stablecoins – What's Going On?

cryptonews.com:

Binance-branded BUSD stablecoin has lost another $1 billion in market cap, descending to the fourth position among stablecoins.

The Binance USD (BUSD) stablecoin currently has a market cap of around $4.3 billion, down from $5.5 billion a month ago, data by CoinMarketCap shows.

This places BUSD in fourth position among stablecoins and right behind decentralized stablecoin DAI, which has seen its market cap rise to more than $4.6 billion over the past couple of days. 

Tether's USDT and USDC Coin (USDC) are the two largest stablecoins in the market, each with a market cap of around $83 billion and $28 billion, respectively. 

BUSD's continued decline in market cap comes after the New York Department of Financial Services (DFS) ordered Paxos, a crypto firm that issues the stablecoin, to stop minting BUSD tokens. 

In a consumer alert, the DFS said it issued the order “as a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance.”

Subsequently, it was revealed that the SEC had issued a Wells Notice to Paxos and plans to sue the company over its BUSD issuance. The agency argued that BUSD is considered an unregistered security.

Following the regulatory clampdown, Paxos announced it would “end its relationship with Binance” and would stop issuing new BUSD tokens from February 21. However, the company will continue to support and redeem the tokens until at least February 2024.

In another blow to the Binance-branded stablecoin, the SEC has launched lawsuits against Binance and CEO Changpeng Zhao, accusing the firm of illegally operating a securities exchange. 

The agency accused Binance of breaking the law by offering unregistered securities to the general public, including its Binance Coin (BNB) toke