The Binance-branded BUSD stablecoin has lost another $1 billion in market capitalization, falling to fourth place among stablecoins.
Data from CoinMarketCap shows that the Binance USD (BUSD) stablecoin currently has a market cap of around $4.3 billion, down from $5.5 billion a month ago.
This puts BUSD in fourth place among stablecoins and right behind decentralized stablecoin DAI, which has seen its market capitalization exceed $4.6 billion over the past few days.
Tether’s USDT and USDC Coin (USDC) are the two largest stablecoins in the market, each with a market capitalization of approximately $83 billion and $28 billion.
BUSD’s continued decline in market cap comes after the New York Department of Financial Services (DFS) ordered Paxos, a crypto firm that issues stablecoins, to stop mining BUSD tokens.
In a consumer alert, DFS said it issued the order “as a result of a number of 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 was planning to sue the company for issuing BUSD. The agency argued that BUSD is considered an unregistered security.
Following the regulatory clampdown, Paxos announced that it would be “terminating its relationship with Binance” and would stop issuing new BUSD tokens as of 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 a lawsuit against Binance and CEO Changpeng Zhao, accusing the firm of operating a securities exchange illegally.
The agency accused Binance of breaking the law by offering unregistered securities to the general public, including its Binance Coin (BNB) token and BUSD stablecoin.
Tether Briefly Loses Peg As Sell-off Intensifies
Last week, USDT lost its dollar peg after the two major pools for stablecoin trading were heavily rebalanced.
At the time, USDT balances on Curve’s popular 3pool, a stablecoin swapping pool consisting of USDT, USDC and DAI, jumped over 70%, suggesting traders swapped millions of USDT for USDC and DAI. Was.
The selling pressure on USDT came after the largest stablecoin in the market saw its market capitalization reach a new record high of over $83.2 billion.
The stablecoin has managed to recover $20 billion in lost market capitalization following the collapse of rival stablecoin TeraUSD last year.
While Tether has managed to recover lost market capitalization over the past year, other stablecoins have not been so successful.
For example, USDC, the second-largest stablecoin, currently has a market capitalization of around $29 billion, well below its all-time high record of over $56 billion, according to data from CoinGecko.
