Stablecoin News: In yet another case of crypto based business going away from the United States, a huge shift in dynamics is happening in the stablecoin ecosystem after the latest action against BUSD. The shift was triggered after the New York Department of Financial Services had on Monday ordered Paxos to stop creating more BUSD. In 2019, Paxos and Binance launched Binance USD (BUSD), which is the third largest stablecoin. The SEC’s latest move came as yet another setback for the cryptocurrency market, which was already feeling the heat from the recent SEC action on Kraken’s crypto staking service.
After the order against BUSD, the stablecoin’s market cap saw a sharp decline of 1.30% in the space of few hours. Meanwhile, fears of further action on other stablecoins is leading to traders making their bets on safer choices within the ecosystem.
USTC’s Circle To Be Next Under Scanner?
In an interesting trend, Circle, the US based company behind stablecoin USDC is apparently preferred as a risky proposition in terms of regulatory action. On the contrary, USDT issuer Tether, which belongs to Hong Kong based iFinex, is considered a safer option. This clear trend is seen on-chain as more and more traders are preferring to park assets in USDT rather than USDC. Market insiders believe this is causing damage to the US market’s reputation in terms of adopting innovation.
In this context, Andrew, a crypto enthusiast on Twitter, is warning of the possibility of Circle’s USDC being the target of the SEC next after BUSD coming under the scanner. He cited the example of PayPal abandoning its stablecoin project in this context.
“Expect Circle and USDC to be the next SEC stablecoin target to receive a Wells Notice.
Sources: Circle will get sued, as will every other stablecoin of consequence.”
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