By Nathan Ferguson
Coinbase, the 2nd-biggest crypto exchange in terms of trading volume around the world, stated that it would suspend trading with the stablecoin Binance USD (BUSD). As per the declaration, the suspension will take place on March 13. This decision was taken after the start of an investigation by the US regulator on the respective stablecoin. The regulatory agency suspected that the token likely unregistered security.
Coinbase Says It Will Delist Binance USD as It Is Likely Not Meeting the Listing Standards
While reviewing the stablecoin, the crypto exchange determined that the listing standards of the platform are no longer being followed by BUSD, as per a Coinbase spokesperson. The crypto exchange administers token listings via its Digital Asset Listings Group. It is a committee responsible for reviewing the assets excluding Brian Armstrong (chief executive officer of Coinbase) and board members, as per its website.
As per the platform, the decisions related to listings are taken by a formal procedure operated by the respective distinctive committee. This committee moves in line with regular procedures. These processes are recorded in official policies and are to be reviewed and approved by the applicable regulatory bodies.
The crypto exchange added that the votes are polled on the assets to be listed, in line with a strict review procedure that assesses the assets for compliance, security, and legal concerns. Coinbase asserted that the voting is not influenced by if the investors or Coinbase Ventures have an asset stake. The crypto exchange added that transparency is given great importance while Coinbase Ventures discloses its interests in the case of the projects.
While discussing its conflict of interest policy, Coinbase mentioned that the platform has a policy related to conflict of interest. The respective policy keeps the employees of the crypto exchange or its board members from getting engaged with the decisions over the listing of the tokens in the case of financial interest. In addition to this, the employees have been restricted by the exchange from trading those tokens which the crypto exchange selects for listing.
This is done to guarantee that no one front-runs assets at Coinbase, even if they do not operate on the crypto exchange’s asset listing group. According to it, the reviews of most of the assets – which are conducted by the Digital Asset Listing Group – are submitted straightly by the asset issuing entities via the Asset Hub portal.
The consumers will even then be permitted to access as well as extract their BUSD tokens following the suspension, the crypto exchange noted on Twitter. The BUSD token is at present known as the 3rd-biggest stablecoin and has a market capitalization of up to $10.6B, as revealed by the data provided by CoinMarketCap.
Crypto Exchange Says Stablecoins Supported by USD Do Not Come in the Class of Securities
The crypto exchange formerly shared on Twitter on the 15th of February that the USD-supported stablecoins do not come under the category of securities. Paxos, the entity responsible for owning as well as operating the stablecoin BUSD, was directed by the New York Department of Financial Services (NYDFS) on February 21 to suspend the Ethereum-based stablecoin’s issuance.
While responding to this order, Paxos announced that it will back BUSD until a minimum of February 2024. A Wells notice was also received by Paxos from the United States SEC recently. It cautioned the platform of a potential enforcement action taken by the US securities regulator as it suspected the stablecoin to be an unlicensed financial security.