Members of the community were puzzled and stated that those who purchased the stablecoin did not anticipate its value to increase.
United States authorities’ interest in Binance USD, a stablecoin created by Paxos Trust Company, generated diverse responses from the cryptocurrency community.
The U.S. Securities and Exchange Commission (SEC) filed a wells notice to Paxos on February 13, stating that BUSD is unregistered security. The New York Department of Financial Services (NYDFS) ordered Paxos to cease the issuing of BUSD on the same day.
As Paxos faces regulatory examination on many fronts, members of the cryptocurrency community have taken to Twitter to express their opinions on the matter. Claims that BUSD is unregistered security have been met with a variety of responses from the crypto community, ranging from dismissal as “FUD” to characterization as an assault on the Binance exchange.
In a tweet, crypto expert Miles Deutscher said that nobody anticipates a return when acquiring a stablecoin. He posted on Twitter:
Additionally, iTrader AshWSB reacted to the topic and rejected it as “FUD.” The trader maintained that BUSD is fully supported and that Paxos’s decision not to issue further tokens would have no impact on the current tokens. “It’s important to be educated, but avoid making emotional decisions,” they said.
Bitcoin expert Tedtalksmacro agreed that BUSD may not be a security under current definitions. The expert speculated that the event may be nothing more than “a shot at Binance.”
Cointelegraph contacted numerous blockchain attorneys amid the news to establish if stablecoins may be classified as securities. While stablecoins are designed to have a constant value, one attorney noted that holders may benefit via arbitrage, hedging, and staking.
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.