Was BUSD, Binance’s Shadow Bank Solution to Access USD-Decode the Truth Here!
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Binance appears to be in deep waters as the platform has been speculated to carry out multiple administered moves in the past and in the present time as well. Recently, the SEC’s crackdown on Paxos, restricting it from minting new BUSD stablecoin has stirred the entire crypto space. Mainly due to the reason, Paxos is registered and BUSD is a regulated entity.
However, the SEC considered it unregistered security and stopped the issuance of new tokens. It has to be noted that Paxos mints new BUSD on the Ethereum blockchain while the BUSD is also issued on the BSC chain which is minted on the BNB chain, Polygon, etc. This feature was introduced for the users to easily swap tokens between Ethereum and the other chains.
Therefore, while Paxos asked to halt the issuance of new tokens, Binance may still continue to do so.
Guessing this is the issue Binance faces relating to their binance-peg BUSD.
ETH (Paxos) BUSD $13.3B
Binance-peg (Binance issued) BUSD $4.7B
So paxos told to stop minting BUSD which means if binance continues to mint BUSD, what is backing their BUSD (binance-peg) pic.twitter.com/WuwiMWciT9
— Skew Δ (@52kskew) February 14, 2023
Besides, Binance also experienced massive outflows of BTC with the latest clarification by the CEO, Changpang Zhao (CZ). Nearly 3500 BTC flew out of the Binance exchange while more than 200 million BUSD is all the centralized exchanges. The time frame of these events creates suspicion over the platform.
Adam Cochran, a known analyst, believes that Binance knew the BUSD issue from SEC, well before it was cracked. The reason behind this speculation is the on-chain data provider, Skew reported a gigantic BTC swap on Binance just to ensure reserve status.
As per the Skew, BUSD was used to elevate the BTC prices and later were swapped. Further, BTC was sold against USDT creating two wallets, one with BTC and the other with USDT, while BUSD was just discarded.
On the whole, Binance now will be under suspicion as the on-chain data points out fabricated price actions within the crypto space. However, Binance was previously been cut off from the dollar at both the banking level and the recent crackdown has disrupted its shadow banking too.
Filed under: Bitcoin - @ February 14, 2023 12:05 pm