TechFlow news, according to Bloomberg citing sources familiar with the matter, Circle, the issuer of the stablecoin USDC, reported to the New York State Department of Financial Services (NYDFS) last year that "after analyzing blockchain data, Circle's team concluded that Binance did not hold sufficient cryptocurrency reserves to back its own assets, including Binance-peg and B-Token."
An NYDFS spokesperson stated that Paxos failed to manage BUSD in a "safe and sound" manner, thus "violating its obligation to conduct individualized risk assessments and due diligence on BUSD customers on an ongoing basis."
Last month, a Binance spokesperson acknowledged that there had been certain historical shortcomings in its reserve system but confirmed these issues have long been resolved and no deficiencies currently exist.
Yesterday, The Wall Street Journal reported that the New York State Department of Financial Services ordered Paxos Trust Co. to cease issuing additional BUSD tokens. According to Binance's statement, Paxos will continue to manage the redemption of BUSD.
Earlier reports indicated that in September 2022, Binance announced it would automatically convert users' existing USDC, USDP, and TUSD stablecoin balances, as well as new deposits, into BUSD at a 1:1 ratio, aiming to improve user liquidity and capital efficiency. This move ultimately reduced Circle's market share in the stablecoin sector. According to CoinGecko data, as of Monday noon Eastern Time, USDC's circulating supply was approximately $40.9 billion, while BUSD's stood at around $15.9 billion.Original link
