Coinbase will suspend trading for the Binance USD (BUSD) stablecoin on March 13, the exchange announced on Feb. 27 on Twitter. The message mentioned its “listing standards” as being behind the decision. BUSD is the third-largest stablecoin by market capitalization.
The decision will apply to Coinbase.com (simple and advanced), Coinbase Pro, Coinbase Exchange and Coinbase Prime, according to the Twitter thread. The exchange added, “Your BUSD funds will remain accessible to you, and you will continue to have the ability to withdraw your funds at any time.”
A Coinbase spokesperson told Cointelegraph:
“Our determination to suspend trading for BUSD is based on our own internal monitoring and review processes. When reviewing BUSD, we determined that it no longer met our listing standards and will be suspended.”
Binance did not immediately reply to a request for comment.
According to Coinbase’s website, its digital asset listings group votes on assets to be listed on the exchange, “informed by a rigorous vetting/review process that evaluates assets against legal, compliance, and technical security standards.” In addition, there are additional business assessments and ongoing monitoring to ensure an asset continues to meet standards.
We regularly monitor the assets on our exchange to ensure they meet our listing standards. Based on our most recent reviews, Coinbase will suspend trading for Binance USD (BUSD) on March 13, 2023, on or around 12pm ET.— Coinbase Assets (@CoinbaseAssets) February 27, 2023
The United States Securities and Exchange Commission reportedly issued a Wells notice — a notice of a planned enforcement action — to blockchain infrastructure platform Paxos Trust, the issuer of BUSD, around Feb. 12. The New York State Department of Financial Services ordered Paxos to stop issuing BUSD on Feb. 13, leading to a $2 billion drop in market cap within days.
Coinbase posted a Twitter thread the following day, saying, “We don’t know what aspects of BUSD might be of interest to the SEC. What we do know: stablecoins are not securities.”
Paxos was reported to be in “constructive” talks with the SEC on Feb 21.