Binance encouraged eligible users to convert their BUSD assets to other stablecoins before February 2024.
The exchange added that Binance-Peg BUSD token withdrawals via BNB Chain, Avalanche, Polygon, and Tron networks will cease in September.
Deposits on these networks including Ethereum will continue until further notice.
After an SEC crackdown, the company previously swapped $1 billion BUSD from its SAFU fund into USDT and TUSD.
Users with BUSD balances on Binance were advised to convert their holdings for other supported stablecoins or assets before February 2024.
An August 31 announcement noted a gradual shutter of BUSD-related products on the crypto exchange particularly for spot and margin trading. Also, starting next month, Binance will no longer support BUSD withdrawals through the BNB Chain, Avalanche, Polygon, and Tron networks. This change is effective come 06:00 (UTC) September 7.
Binance Winds Down BUSD Support
BUSD deposits on the aforementioned networks are possible until further notice. Per the announcement, deposits and withdrawals via Ethereum remain unaffected.
The announcement comes six months after digital asset issuer Paxos was ordered to cease minting BUSD tokens by U.S regulators. New York’s Department of Financial Services launched a probe into the NY-regulated firm, effectively crippling fresh BUSD issuance.
The Securities and Exchange Commission labeled BUSD an unregistered security in the same breath. Binance and CEO Changpeng Zhao were sued for violating U.S. laws months later as the SEC cast its regulatory shadow over prominent players in crypto.
SEC vs Crypto
Similar allegations of rulebreaking and unregistered securities sales were levied against rival crypto exchange Coinbase. Notably, Coinbase CEO Brian Armstrong was not named as the subject of investigations at the time.
Both firms rebutted these allegations, arguing against the SEC’s choice to regulate through enforcement actions rather than provide clear guidelines for the digital asset industry.
The SEC currently has a trifecta of cases against Coinbase, Grayscale, and Ripple, all involving opposing views regarding interpreting securities laws for blockchain-based crypto assets. Judges in two of these cases have ruled against the SEC stand, either partially in Ripple’s case or completely in the Grayscale spot Bitcoin ETF saga.
DeFi proponents also hailed SDNY Judge Katherin Polk Failla’s ruling that software cannot be held liable for user losses or third-party damages in the Uniswap lawsuit. It’s unclear if this win for DeFi sets any precedent in the Tornado Cash case.