Binance BUSD Stablecoin Slips to Fourth Place in Market Cap, Experiencing a $1 Billion Decline in 30 Days”
According to data from CoinMarketCap, the dollar-pegged Binance USD (BUSD) stablecoin has now dropped to the fourth position among other stablecoins in terms of market capitalization. Over the past 30 days, BUSD witnessed a significant dip of over $1 billion.
As of the time of writing, BUSD’s market cap stands at $4.30 billion, marking a 29% decrease from its previous valuation of $5.54 billion on May 18. This decline has been part of a continuous downward trend for BUSD since December of the previous year when its market cap reached a peak of $23 billion.
The decrease in BUSD’s market cap aligns with significant developments surrounding Binance, particularly after the dramatic collapse of FTX in November 2022. A report in December hinted at potential targeting of Binance by the U.S. Department of Justice, resulting in net withdrawals of $3.6 billion within a week. During this period, market makers redeemed a substantial amount of BUSD, with Jump Finance alone withdrawing over $245 million.
The BUSD stablecoin was created through a partnership between Binance and Paxos Trust in September 2019. Paxos issues and owns the product, while Binance licenses its brand. However, this partnership brought new challenges for Paxos. In February, the company reportedly received a Wells Notice from the U.S. Securities and Exchange Commission, alleging that Binance USD was an unregistered security.
As a result of the investigation, the New York Department of Financial Services (NYDFS) ordered Paxos to halt the issuance of BUSD. These events collectively led to a significant decrease in BUSD’s market share, plummeting from $15.88 billion on February 12 to $8.38 billion on March 13.
Adding to the string of setbacks, Binance faced an SEC lawsuit on June 5, accusing the exchange of offering unregistered securities. The U.S. regulator filed 13 charges against Binance, including unregistered offers and sales of the BNB and BUSD tokens.
Read Also: US Court Gives Green Light to SEC-Binance.US Agreement
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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