Coinbase, the world’s second largest cryptocurrency exchange by trading volume, said Monday it is suspending trade in the Binance USD (BUSD) as of March 13. The move comes after the U.S. regulator said earlier this month that it was investigating the stablecoin as a possible unregistered security.

See related article: Paxos ordered to stop issuing Binance USD stablecoin: report

Fast facts

  • “When reviewing BUSD, we determined that it no longer met our listing standards,” a Coinbase spokesperson told Forkast via email. 
  • Coinbase manages token listings through its Digital Asset Listings Group, a committee reviewing assets that excludes its chief executive officer Brian Armstrong and board members, according to its website.
  • Users will still be able to access and withdraw their BUSD after the suspension, Coinbase wrote on Twitter. BUSD is currently the third largest stablecoin with a US$10.6 billion market capitalization, according to CoinMarketCap data.
  • Coinbase previously tweeted via its official handle on Feb. 15 that U.S. dollar-backed stablecoins are not securities.
  • Paxos, which owns and operates BUSD, was ordered to suspend the issuance of the Ethereum-based stablecoin by the New York Department of Financial Services (NYDFS) effective on Feb. 21. Paxos stated that it will support the stablecoin until at least February 2024.
  • New York-based Paxos also received a Wells notice from the U.S. Securities and Exchange Commission earlier this month, which warned it of a possible enforcement action from the agency as it saw the stablecoin as an unregistered financial security.
  • Paxos published a statement last week saying BUSD is not a security, and that it is engaging in “constructive discussions” with the SEC.
  • Binance, the world’s biggest crypto exchange, said in an email statement earlier this month that it only licenses its brand to Paxos for use with BUSD.

See related article: Coinbase CEO Brian Armstrong says SEC has ‘terrible’ idea to ban crypto staking for U.S. retail customers