Hi Carlos
"Where there's smoke, there's fire."
This idiom is primarily true in the world of crypto.
Last year, it was Luna, UST, Celsius, Vauld, and FTX, to name a few.
And in the latest development, BUSD is in the cross-fire.
Here is what's happening:
U.S. SEC has told Paxos Trust Co. that it plans to sue the company for violating investor protection laws. The notice alleges that Binance USD, a digital asset that Paxos issues and lists, is unregistered security. WSJ reported.
Who is Paxos Trust Co.?
Now, if Paxos (Not directly related to Binance) is issuing BUSD, how does it impact us?
Here is an excerpt from the Binance blog on BUSD
"BUSD is natively issued on Ethereum, thus limiting its usage outside of the Ethereum ecosystem. In order to extend BUSD's utility to other blockchains, Binance offers a wrapped version of the stablecoin, Binance-Peg BUSD, which is designed to track the value of the original, ERC-20 BUSD at a 1:1 ratio. "Wrapping" tokens is blockchain lingo for creating versions of the original asset that are transportable to other chains for the sake of increasing interoperability and the interconnectedness of the digital asset space. Normally, the value of wrapped tokens is secured by locking the collateral of the original asset, which is the case with Binance-Peg BUSD."
In a few hours, WSJ broke the news that Paxos will stop issuing new BUSD, and will allow redemption of BUSD.
This news is unfolding...
What an investor and trader should do?
Well, first thing first -
- If you are holding $BUSD, Convert it immediately to USDT. (Why not $USDC, because it might be in the crosshair of SEC against the crypto).
- Binance will sooner or later remove BUSD, and you should be able to trade using other stables like USDC or USDT.
- Keep an eye on Aave's upcoming stable coin called GHO.
- Follow @CoinSutra telegram to stay updated in real-time. For breaking news, you should join CoinSutra on Discord here.
- Expect the market to remain volatile in the near term, and if you are trading, have proper risk management.
My biggest fear is that if SEC attacks $USDC, it could impact the market in the short term.
Note: 4.7 Billion USDC was burned on 10th Feb. What it meant for you is that someone has redeemed their USDC for dollars. ( Source )
I'm patiently watching the market, and this news should not be taken lightly.
I will keep you updated on CoinSutra Telegram about the latest development.
Please let me know if you have any significant insights or outlook on this news.
See you in the next email.
Ta da!
Mr. Creatonics
CoinSutra.com
Note: This is an educational content and should not be considered as an investment advice. Use this information as just a news, and research further before making any investment or trading decision.
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Can BUSD Be The Next UST - 🚨 Attention Binance And BUSD User