Paxos Orders to Discontinue US Dollar Pegged Stablecoin Binance Stablecoin BUSDT- Has the SEC’s War on Crypto Started? – Blockchain News, Opinion, TV and Jobs

By Marcus Sotiriou, Market Analyst at a publicly listed digital asset broker GlobalBlock (TSXV:BLOCKS).

Bitcoin is currently testing $21,500, a key support level, while US regulators hone in on crypto firms. The SEC is suing Paxos, the issuer of BUSD, and has labeled BUSD an “unregistered security”. Paxos has been ordered by the New York Department of Financial Services (which regulates Paxos) to stop issuing BUSD. Binance CEO, CZ, has announced that they will continue to support Binance USD, but that they “expect users to migrate to other stablecoins over time,” and they will “make product adjustments accordingly. for example, moving away from using BUSD as the main pair for trading, etc.”

Currently, BUSD has a market cap of around $16 billion but CZ claims, “as a result of the NYDFS enforcement actions, its market cap will only decrease over time.” The SEC’s actions appear to have fallen far short of the mark. They have labeled the safety of BUSD, but hard pegged stablecoins do not expect returns and have a fixed price, like stored value Gift Cards.

The SEC also took action against Kraken last week, as they announced a settlement with Kraken agreeing to stop offering betting as a service and pay a $30 million fine. However, no money will be returned as there are no actual victims. Regulation by enforcement is confusing for crypto enthusiasts. The SEC claims that “all a crypto project has to do is log in and register,” yet when they do, they are simply told “no.” People are desperately trying to figure out how to legally offer products while getting no guidance.

A new study of crypto-related lawsuits since 2018 shows a 42% increase in crypto lawsuits in the US in 2022, but it seems the SEC’s war on crypto is just getting started. The US risks avoiding crypto activity abroad because they are left behind.

Could this be an opportunity for other governments like the UK to capitalize on?