Binance Announces Discontinuation of BUSD Support Effective December 15

Binance has formally announced the discontinuation of support for its BUSD stablecoin, reiterating its previous commitment to gradually withdraw assistance for this digital asset. This decision stems from a directive issued to Paxos in February, the entity responsible for BUSD issuance, instructing them to halt the creation of the coin. Binance had initially revealed its intention to phase out BUSD support gradually back in August.

In a blog post released on Wednesday, Binance clarified that users would still be able to redeem their BUSD holdings until February 2024. However, withdrawals from the exchange will cease on December 31. Any remaining BUSD balances after this date will undergo automatic conversion to FDUSD, an alternative stablecoin issued by FD121 Ltd.

Recent data from CoinMarketCap reveals that BUSD's 24-hour trading volume currently hovers just below $400 million, marking a significant decline from the $900 million reported in August. This decrease in trading activity coincides with the heightened regulatory scrutiny faced by Binance in February when the New York Department of Financial Services (NYDFS) compelled Paxos to halt BUSD issuance. In response, Binance found itself entangled in legal issues, facing a lawsuit from the Commodity Futures Trading Commission (CFTC). The allegations included the purported offering of unregistered cryptocurrency derivative products in the U.S. and violations of federal laws.

Under the guidance of its newly appointed CEO, Richard Teng, who assumed the position following the departure of founder Changpeng "CZ" Zhao as part of a $4.3 billion settlement with the U.S., Binance has expressed a strong commitment to collaboration with regulators. In a recent blog post, Teng outlined his dedication to ensuring Binance's compliance with American laws and emphasized the fostering of a cooperative relationship with regulatory authorities.

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