Following increased regulatory pressure, Paxos, the issuer of the $16 billion Binance USD (BUSD) stablecoin, has burned more than $700 million of BUSD tokens since Monday.
Paxos announced it would stop issuing the cryptocurrency amid mounting regulatory pressure, blockchain data shows.
Data from blockchain intelligence firm Nansen shows that a Paxos Treasury crypto wallet transferred $703 million worth of BUSD tokens to a burn address within 27 hours starting Monday morning, essentially removing the coins from circulation.
Paxos Treasury sent the first transaction of $144.5 million worth of BUSD at Monday 13:47 UTC, data from blockchain monitoring tool Etherscan shows – less than two hours after the announcement. Eight more transactions followed in the next 27 hours, worth some $559 million.
BUSD is a dollar-pegged stablecoin backed by short-term treasuries and cash-like assets, so holders can redeem the token 1:1 to a U.S. dollar anytime. U.S.-based fintech firm Paxos issues the token according to regulation from the New York Department of Financial Services, the state’s main financial regulatory agency.
The manoeuvre is a sign of investors exiting BUSD quickly. The $700 million redemption in a little more than a day represents some 6% of the total coins in circulation.
Changpeng Zhao, chief executive of Binance, the world’s largest crypto exchange by trading volume, tweeted Monday that BUSD market capitalization “will only decrease over time.”