Summary:
- Binance moved BUSD assets from its Secure Asset Fund for Users fund into two other stablecoins – TUSD and Tether USDT.
- The crypto exchange made the swap with crypto trust company Paxos can no longer mint new BUSD tokens due to regulatory enforcement action from federal and state regulators.
- SAFU’s insurance fund launched in 2018 was valued at $1 billion in January 2022 and now features BNB, BTC, TUSD, and USDT holdings
Binance swapped BUSD holdings in its Secure Asset Fund for Users (SAFU) fund to two other stablecoins, the crypto exchange announced on Friday. The BUSD held in SAFU was transferred into TUSD, an Ethereum-based stablecoin issued by the TrustToken platform, and Tether’s USDT.
Crypto’s largest centralized exchange made the swap to “ensure that assets in SAFU continue to protect users” in the long run since Paxos can no longer mint new BUSD coins and the token’s market cap will dwindle to zero over time.
Indeed, crypto trust company and BUSD issuer Paxos faced enforcement action from two regulators over its stablecoin. The U.S. Securities and Exchange Commission (SEC) served Paxos a Wells notice, alleging securities violations. New York’s Department of Financial Services (NYDFS) ordered that Paxos stop minting new BUSD coins.
Since the Paxos saga came to light, protocols and industry players have moved to wind down their exposure to the Binance-branded stablecoin. Coinbase suspended BUSD trading on Mar. 13. The Aave community voted to offboard BUSD from the DeFi lender’s V2 market on Ethereum.
Paxos engaged the SEC in “constructive talks” after denying the securities violation claims. The crypto trust co also promised to litigate if necessary.
Binance SAFU Insurance
Binance launched SAFU in 2018 as an insurance fund to safeguard user assets, per details from the company’s website. The fund was initially financed by a mix of Binance’s own funds and a percentage of trading fees.
In January 2022, SAFU was valued at $1 billion. The fund features several crypto tokens including the company’s BNB Coin, leading crypto Bitcoin (BTC), TrustToken’s TUSD, and crypto’s largest stablecoin by market cap USDT.
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