Investors Pull $6-B Out Of Binance's Stablecoin

Binance's stablecoin, Binance USD, has seen around $6 billion of outflows following a US crackdown on the company that issues the token, according to market tracker CoinGecko, Elizabeth Howcroft reported for Reuters.

Photo Insert: Investors have pulled more than $6 billion out of the Binance-branded token in the past month.

Paxos Trust Company, which issues Binance USD, said on Feb. 13 that the US Securities and Exchange Commission (SEC) had told the company it should have registered the product as a security and is considering taking action against the platform.

On the same day, New York's chief financial regulator said in a consumer alert that it had ordered Paxos to stop creating the token.

An NYDFS spokesperson later told Reuters via email that Paxos violated its obligations for "tailored, periodic risk assessments" and due diligence checks on Binance and Binance USD customers needed to stop "bad actors from using the platform."

Binance CEO Changpeng Zhao said that the regulator's decision meant the market cap of the token would decrease over time. On Wednesday, the value of all Binance USD was around $10.5 billion, down from $16.1 billion on Feb. 13, CoinGecko said.

The Financial Times reported on Wednesday that investors have pulled more than $6 billion out of the Binance-branded token in the past month, citing data from blockchain analytics firm Nansen.

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