Finally, the CEO of Binance has spoken on the Paxos BUSD case that the SEC has been investigating, and he has confirmed that all funds are secure.
Zhao stated that although the troubled business Paxos issues and lists BUSD, the money is still safe despite the current investigation and the imminent lawsuit that would be filed by the SEC against Paxos. The CEO stated that Binance has granted Paxos a license to use the Binance name and emphasized that BUSD is a product issued and held by Paxos.
In a series of tweets (1), Zhao elaborated on the New York Department of Financial Services (NYDFS) directive to Paxos to halt its minting operations in response to the claims.
In addition, the CEO of Binance speculated that the investigation into BUSD by the SEC has set off a chain reaction throughout the crypto currency market and would ultimately decrease the coin's value.
Zhao, however, thought that Paxos would continue to support the product even when there was an anticipated reduction in the market cap of BUSD.
The Chief Executive Officer of Binance also mentioned that the New York-based blockchain financial technology company would continue to manage any future redemptions.
Zhao further mentioned that the Paxos funds are secure and completely protected by bank reserves, which have been examined several times by various accounting companies.
Regarding the discussion that took place between Binance and Paxos, he continued:
"Binance is committed to assisting BUSD well into the foreseeable future. Users may switch to utilizing alternative stablecoins as time passes. And we will make improvements to our products following these findings. For example, we will stop utilizing BUSD as the primary pair for trading, etc.
Zhao also said that Binance is taking further safeguards by covering other projects throughout all of the jurisdictions considered regulatory hotspots. To quote the chief executive officer of Binance:
"Given the current legal uncertainty in some regions, we will be assessing other initiatives in those jurisdictions to guarantee that our consumers are shielded from any unnecessary harm,"
On the Paxos BUSD Case of SEC
Zhao stressed that he is unaware of the reported SEC complaint against Paxos involving breaches of investor protection laws and that he does not know about the litigation.
On the other hand, he said that classifying BUSD as security would significantly impact the whole crypto currency market.
"Stablecoins are an important safety net for investors seeking shelter from market fluctuations, and reducing their access might seriously affect millions of people all over the globe," a spokesperson for Binance said while describing that BUSD is 1 to 1 backed and NYDFS regulates.
In addition, he noted that the top crypto currency exchange would continue to keep an eye on the issue with the SEC.
Another crypto exchange, Kraken, was ordered by the SEC to comply with regulations regarding its staking services in the United States just the week before.