Over the past week, Binance has had quite a bit of headwind due to the allegations from the Security and Exchange Commission (SEC) regarding BUSD. There is now a shovel on top of that. Binance reportedly transferred large sums of money in 2021 to Merit Peak Ltd., a trading firm of Binance CEO Changpeng “CZ” Zhao. It was about $400 million at the time.
Suspicious Binance transactions
Reuters news agency came out with this information. According to the report, the transactions began in late 2020 and continued for several months into 2021. It is not clear at this time whether the money belonged to customers. Binance has not yet commented in detail on the news. However, a spokesperson believes that the news is “dated”.
There will most likely be more clarity about the transactions in the coming days. At first glance, however, it is vaguely reminiscent of the FTX fiasco.
The stablecoin landscape is changing
As mentioned, Binance has seen better weeks. At the end of last week, Binance’s stablecoin, BUSD, came under fire from the SEC. BUSD is an unregistered security, according to the allegations. Paxos, the company that issues BUSD on behalf of Binance, has immediately stopped minting new stablecoins.
In addition, Binance and Paxos are now in the process of burning, or destroying, BUSD tokens. Hundreds of million dollars of BUSD have already been taken out of circulation in this way. Via Twitter, Binance CEO CZ announced that the market supply of BUSD has shrunk by almost $2.5 billion. In addition to burning, a large part of this amount has been converted into USDT, the most famous stablecoin.
The supply of USDC, the number two on the list of largest stablecoins, also fell sharply. A decrease of more than 700 million dollars. USDT seems to be absorbing market share from BUSD and USDC for the time being. Earlier this week, CZ announced possibilities for non usd to explore stablecoins in response to the regulatory policies of the US authorities.