Binance users withdraw $500 million in an hour because of BUSD ban
US authorities have ordered a halt to the issuance of Binance's BUSD token after it was deemed an unregistered security. Paxos, the company responsible for the token, will stop issuing new stablcoins, which have been created in collaboration with Binance since 2019, as of 21 February. Since the release of the token, the crypto-exchange has been actively encouraging users to choose it in their calculations.
It is already known that the existing 16.5 billion tokens will be exchangeable into USDP at a 1:1 ratio.
Amid the negative news, Binance users transferred more than $500 million to other exchanges in just one hour. Approximately $439 million of this was to the Ethereum blockchain, with another $102 million to Binance Smart Chain.
BNB, the cryptocurrency's proprietary token, fell 6% on the news, while Ethereum fell 2.24%, dragging other altcoins with it. And BUSD, which started Binance's problems, is on the verge of losing its peg to the US dollar, trading at around $0.98.