After the cryptocurrency sector was hit by the news that crypto firm Paxos, the issuer of Binance dollar-pegged stablecoin, was ordered by the regulators to halt the BUSD minting, nearly $1 billion in digital assets flew out of the crypto trading platform Binance in a single day.
Indeed, according to the on-chain data from crypto tracking platform Dune Analytics, $916 million in digital assets were withdrawn from the crypto exchange on February 13, as the prominent cryptocurrency analyst Ali Martinez pointed out in his tweet on February 14.
On top of that, the fallout has included traders moving their stablecoins and fleeing from BUSD, as the number of addresses holding 1,000 to 10,000,000 BUSD has been rapidly declining, dumping $208 million worth of the coin, according to recent data by the on-chain and social metrics platform Santiment.
Crypto crackdown continues
As it happens, the enormous outflow from Binance took place amid the newest blow to the crypto exchange in the form of a crackdown that multiple agencies have openly initiated against it, among which is the order by the New York Department of Financial Services (NYDFS) for Paxos’ to cease BUSD issuance.
At the same time, Paxos is facing a lawsuit by the United States Securities and Exchange Commission (SEC), which alleges that the company was illegally selling BUSD that the agency considers a security. According to Binance CEO Changpeng Zhao, if courts side with the SEC, it would “have profound impacts on how the crypto industry will develop (or not develop)” in affected jurisdictions.
Earlier, crypto exchange Kraken was forced to suspend its staking services in the U.S. and pay a $30 million settlement to the SEC over allegations that it had violated regulations, adding up to the sentiment of ‘FUD’ that has led to a number of investors getting out of the market, and the global crypto market capitalization briefly dropping below the psychological level of $1 trillion.
By press time, the total crypto market cap has managed to recover some of its losses and is currently standing just above the $1 trillion mark, as per the latest data retrieved by Finbold from the crypto asset tracking platform CoinMarketCap on February 14.
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