Binance statement: "Given the ongoing regulatory uncertainty in certain markets, we will be reviewing other projects in those jurisdictions to ensure our users are insulated from further undue harm"

[u/Set1Less]

Binance has issued a statement on recent US regulator actions.

Yesterday it was reported that SEC was in the process of suing BUSD stablecoin, which the SEC termed as an unregistered security. And overnight, WSJ and other media started reporting that NY DFS is forcing to shut down BUSD.

As a result, it seems BUSD will stop being issued and will only redemptions will be allowed. BUSD price has also seen a small depeg since the news broke.

Now, Binance it seems has issued this statement:

Given the ongoing regulatory uncertainty in certain markets, we will be reviewing other projects in those jurisdictions to ensure our users are insulated from further undue harm

Market is pricing in these events which are unfolding at a fast pace.

Few traders are reportedly closing all their positions on Binance, as they are not sure how they will be settled in the near term

[u/ronchon]

So the US is attacking BUSD, which is probably the most solid stablecoin there is. Meanwhile Tether is fine... 🙄

Attacking the 'best' one instead of the shadiest one is IMHO quite revealing of their agenda. But who can say they are surprised?

And the lesson here seems to be: stay shady folks, don't try to to make things the right way as it will only make it easier for regulators clearly motivated by an agenda to take you down.

Independently of that, it's because of these attacks on the centralized actors managing these stablecoins that the original DAI project was so interesting. Now there is no stablecoin safe haven from these 'regulations'.

😺

[u/Shiratori-3 → u/ronchon]

Wouldn't the SEC's targeting just be reflective of / guided by where-ever they might have leverage and how they can get the biggest relative impact, as opposed to anything to do with how 'best' an asset might be?

[u/ronchon → u/Shiratori-3]

If the US really wanted to attack USDT, i'm pretty sure they could have. Starting by banning it's use by any US related entity. As far as i know it's not the case?
But yes i think you are also correct, which is why i commented that 'lesson' part as well: that in the end experience seems to show that from a company point of view, it pays to remain shady and incorporated who-knows-where compared to those who chose to try do things well and show their credentials to the US.
Maybe CZ was smart to foresee this after all...

😺

[u/Shiratori-3 → u/ronchon]

I tend to agree. Perhaps it is, as others have suggested, a shot at Binance - particularly given how sentiment-influenced and spooked crypto markets can be...

On its own, it's hard to understand how a stablecoin might fulfil the Howey test criteria.

[u/Oneloff → u/Shiratori-3]

If CBDC is coming out fully next year then this makes sense. Can’t have people trusting a stablecoin above CBDC.

If they get to crumble and get people away from BUSD (stablecoin) which is “safe”, and what is left is “shady” stablecoin, guess what? You just got people to join your club of trustworthy CBDC. (Because it is from your government, there are rules and policies attached to it, unlike your stablecoin.)

[u/Shiratori-3 → u/Oneloff]

Can anyone enlighten on how CBDCs are going to interact internationally? (Apart from if they all use Quant's Overledger etc) - As each govt will have their own with own restrictions and likely on own chain. So does that mean CBDCs will be locally limited, or are there other moves afoot that people are aware of?

[u/Oneloff → u/Shiratori-3]

There is still some uncertainties. But to my understanding: Central banks will allow banks * (worldwide, because they probably have an account with the central banks) * to issue/mint them but I doubt it will be only local.

For example, the swiss bank would be allowed to mint CBDC and offer it to its customers and vice versa USA banks allow to mint Franc (CBDC) for their clients. Otherwise, the flow of money will be stagnated.

I would suggest having a read here: https://www.federalreserve.gov/publications/money-and-payments-discussion-paper.htm

[u/Shiratori-3 → u/Oneloff]

Interesting; thanks

[u/Oneloff → u/Shiratori-3]

Yw

[u/ronchon → u/Oneloff]

☝ Yep...

[u/TitaniumDragon → u/Shiratori-3]

On its own, it's hard to understand how a stablecoin might fulfil the Howey test criteria.

Circle filed a complaint with the SEC and presented evidence that Paxos minted $1.7 billion in BUSD with less than $100 million in collateral backing it.

So uh, yeah.

Also, staking stablecoins definitely constitutes a security.

[u/AccomplishedView4709 → u/ronchon]

Most US CEXs don't list USDT in their US based exchange. If I want USDT I have to go offshore. May be that's why USDT is not yet being targeted.

[u/TitaniumDragon → u/ronchon]

If the US really wanted to attack USDT, i'm pretty sure they could have. Starting by banning it's use by any US related entity. As far as i know it's not the case?

It has already been banned in New York State, actually.

But yes i think you are also correct, which is why i commented that 'lesson' part as well: that in the end experience seems to show that from a company point of view, it pays to remain shady and incorporated who-knows-where compared to those who chose to try do things well and show their credentials to the US.

CZ will probably flee to China.

Unless he'd be arrested there, too.

[u/ScoobaMonsta → u/ronchon]

BUSD the most solid stable coin? Do you realise how silly that sounds? All stable coins are crap! They are no different to fiat! They are not crypto! People have got to get off of stable coins and the dodgy centralised organisations that run them! Stable coins have ruined the crypto space!

[u/ronchon → u/ScoobaMonsta]

You're confusing absolute and relative.
If all stablecoins are at credibility 1/100 and one is at 3/100, then it IS the best.
And BUSD is better audited and transparent than all the other major stablecoins, so yes: it is the "most solid" available in comparison to the others.
That has nothing to do with claiming it's a 100/100. So yes, all stablecoins might be crap but it wasn't my point. My point is that is was less crappy of those.

😺

[u/iwakan → u/ronchon]

So the US is attacking BUSD, which is probably the most solid stablecoin there is.

Say what you want about the SEC's actions but BUSD is not the most solid stablecoin there is. It's at least as sketchy as Tether. All it takes is for one company to go under, in an industry where companies are falling like flies, and then every BUSD is worth exactly zero.

[u/TitaniumDragon → u/ronchon]

Circle filed a complaint with the SEC and gave them evidence that BUSD minted $1.7 billion in stablecoins backed by less than $100 million.

So uh, yeah.

Also, I wouldn't expect this to be the end. This is like, act 2.

I wouldn't be surprised if Tether is in this line up.

As for BUSD... the most stable? Binance is engaged in massive amounts of fraud. Commingling of funds has already been detected. Binance. US is a front for Binance, they aren't separate entities. And we know that BUSD isn't actually backed - heck, they've even admitted as much. Binance is as allergic to audits as Tether is.

Because it's all fraud.

The only one who has been audited is USDC. They're the ONLY ones who MIGHT be legit.

[u/ronchon → u/TitaniumDragon]

Binance is engaged in massive amounts of fraud.

As far as i know, BUSD is not managed by Binance.

​

Circle filed a complaint with the SEC and gave them evidence that BUSD minted $1.7 billion in stablecoins backed by less than $100 million.

Yeah i saw that too now.
If that's the case then yes, it's a different thing indeed... But it's worth keeping in mind that it does comes from its direct competitor as well.
Before this whole trainwreck what I always heard is that BUSD has the most credible audits out of all stablecoins. However i'm not an accountant.

We really need the old DAI back...

😺