LUCKNOW (CoinChapter.com) — Cryptocurrency exchange Binance ceased support for its BUSD stablecoin on Dec. 15, 2023. BUSD, issued by Paxos, faced regulatory crackdowns this year, prompting Binance to end its relationship with the coin gradually.
“From 2024-01-02 03:00 (UTC), BUSD withdrawals will be disabled, and any remaining BUSD balances in users’ Binance accounts will be automatically converted to FDUSD at a 1:1 conversion rate. After that, users may continue depositing BUSD into Binance and manually convert their BUSD to FDUSD at a 1:1 conversion rate until further notice,” written in a notice issued by Binance.
Binance Urges Users to Switch to FDUSD Amid BUSD Phase-Out
Binance has urged users to convert their BUSD to FDUSD, the exchange’s alternative dollar-pegged cryptocurrency. To minimize the fallout, Binance has enabled fee-free conversion of BUSD into FDUSD until Dec. 15.
“Users are encouraged to withdraw or convert their BUSD assets into other available assets on Binance before 2023-12-15. Users may trade their BUSD balances for FDUSD at zero trading fees or convert their BUSD balances to FDUSD on Binance Convert at a 1:1 conversion rate with zero fees,” Binance wrote in the notice.
Making the switch now will help users avoid future trading delays or interruptions.
While BUSD remains exchangeable until February 2024, Binance strongly advises customers to act quickly and redeem tokens for FDUSD. This alternative stablecoin allows seamless transactions on Binance going forward. Converting ahead of the December deadline will enable uninterrupted access to dollar-pegged crypto trading and lending services after BUSD gets delisted next year.
The wind-down of BUSD services follows regulatory crackdowns on the Paxos. In February 2023, the New York Department of Financial Services ordered Paxos to stop minting BUSD due to alleged unregulated activity. Subsequently, the Commodity Futures Trading Commission sued Binance for purportedly offering illegal crypto derivatives to U.S. customers. These troubles and some of the Binance’s legal issues led the exchange to end BUSD support.
Phase-Out Signals Regulatory Compliance Efforts
Facing this one-two punch of enforcement actions, Binance announced this August that it would slowly terminate its relationship with BUSD over the coming months.
This process is now reaching completion with the Dec. 15 deadline. As part of the ceasing process, Binance will halt BUSD withdrawals on Dec. 31 and automatically convert any leftover balances to FDUSD – a stablecoin issued by FD121 Ltd.
The impending removal of BUSD support signals Binance’s efforts to increase regulatory compliance under new CEO Richard Teng. The new CEO has committed to working cooperatively with authorities amidst Binance’s recent $4.3 billion settlement with U.S. regulators. Phasing out BUSD may be one such show of good faith.
