New York regulators directed a crypto company to stop issuing one of the largest dollar-pegged cryptocurrencies, as a government clampdown on the sector widens, the Wall Street Journal reported. The New York Department of Financial Services ordered Paxos Trust Co., which issues and lists Binance’s dollar-pegged cryptocurrency, to stop creating more of its BUSD token, Binance said in a statement. Paxos will continue to manage redemptions of the product, the crypto exchange added. BUSD, also known as Binance USD, is a stablecoin backed by U.S. dollars on a one-to-one basis. Binance and Paxos partnered to launch it in 2019 and said the stablecoin was approved by New York’s financial regulator. Binance said that BUSD is issued and owned by Paxos and that the crypto company only licenses its brand. There were 6.2 million holders of BUSD as of Feb. 13, according to Binance’s website. Paxos said in a statement that it will stop issuing new BUSD on Feb. 21. and that it will end its relationship with Binance for the branded stablecoin BUSD. It added that BUSD will continue to be redeemable through at least February 2024 for U.S. dollars or Paxos’ own stablecoin, Pax Dollar.
