Binance Faces Large Withdrawals and Token Burns Following Regulatory Woes of Paxos

In the past 24 hours, investors seem to be concerned about regulatory measures against Paxos and its stablecoin Binance USD (BUSD), leading to a surge of withdrawals from crypto exchange Binance.

Simultaneously, the BUSD token has observed substantial redemptions, with 342 million BUSD burned in the last 24 hours, as reported by Peckshield. As a result, the BUSD ticker has declined to $1.00.

On February 12, it was reported that the United States Securities and Exchange Commission has given notice of potential enforcement action against Paxos, claiming that its stablecoin is an unregistered security, although Paxos disputes this allegation.

Nansen, a blockchain intelligence platform, compiled data indicating that Binance had recorded net outflows of $788.5 million for multichain tokens in a 24-hour period, as outflows of $2.7 billion surpassed inflows of approximately $1.97 billion.

According to data from Dune analytics, this marks the most substantial 24-hour net outflow since December 17 when Binance's proof-of-reserve audits were removed from auditor Mazars' website.