Due to Binance USD (BUSD) not meeting the listing prerequisites, cryptocurrency exchange Coinbase will be suspending the trading of the stablecoin beginning March 13 — according to a recent tweet from the company.
Coinbase.com, Coinbase Pro, Coinbase Exchange, and Coinbase Prime are all affected by the suspension. According to Coinbase, users will still be able to access and withdraw their BUSD funds whenever they choose. As of February 17, 2023, Coinbase does not yet offer any crypto trading pairs using BUSD; the sole pair supported in some regions is BUSD/USD.
The suspension follows the U.S. Securities and Exchange Commission (SEC) notifying Paxos that BUSD is a securities in a Wells notice, which occurs before an enforcement action. In response, Paxos delisted the stablecoin.
Taking into consideration that BUSD has been getting a lot of regulatory pressure lately, the suspension might be a way for Coinbase to avoid getting into the SEC’s cross hairs — and without much of a drawback due to the low volume of BUSD on the exchange.
After the SEC sued Ripple Labs for raising $1.3 billion in unregistered securities transactions through the token XRP, the Director of Regulatory Affairs at Blockchain Intelligence Group, Timothy Cradle, claimed that exchanges adopted comparable measures in 2020. Following the revelation of the lawsuit, many exchanges, including Coinbase, temporarily banned trading in XRP. The legal battle between Ripple Labs and the SEC still wages on to this day.
