- Binance Coin price fell amid news around Paxos and its stablecoin BUSD
- BNB traded to lows of $284, extending intraday declines from highs of $321 as uncertainty engulfed the stablecoin.
- Paxos, which issues and handles BUSD redemptions, announced it had halted its relationship with Binance.
BNB, the native coin of the Binance exchange, has extended intraday losses to over 10% as price action continued to suffer from negative news.
BNB price dumps 10% amid BUSD reports
As we reported earlier, Binance Coin had dropped by nearly 6% in the morning as the market reacted to news surrounding Binance USD (BUSD), a stablecoin owned and issued by US regulated company Paxos Trust.
But BUSD is the main stablecoin in the Binance ecosystem and the news that Paxos had been ordered to stop issuing any new tokens triggered massive outflows. The negative sentiment increased as it emerged the US Securities and Exchange Commission (SEC) was suing Paxos, which later on in the day announced it had terminated its relationship with Binance regarding the brand’s link to BUSD.
Here’s a chart by one market analyst showing an earlier reaction to the news.
Binance coin BNB slumped >8% after New York Regulator ordered Paxos Trust to stop creating more of its #BUSD token. BUSD is a stablecoin backed by US Dollar, which was created in 2019 in partnership betw crypto platform Binance & blockchain comp Paxos. BNB is native Binance token pic.twitter.com/TXu514EEQ6
— Holger Zschaepitz (@Schuldensuehner) February 13, 2023
While Binance CEO Changpeng Zhao announced the exchange would continue to support the stablecoin, he did acknowledge there would be migrations to other stablecoins as result of the regulatory uncertainty.
The price action for BNB on Monday afternoon has thus seen the coin trade to lows of $284, with these level the lowest for Binance Coin since 18 January 2023. The coin currently trades around $286 according to data from CoinGecko.
Today’s losses have pushed the price -13% down on the seven day chart.