Binance boss Changpeng Zhao tried to distance his exchange from a dollar-pegged token currently under fire from the SEC.
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The SEC has ordered Paxos to stop minting a Binance-branded token pegged to $1.
Changpeng Zhao tried to play down his exchange’s links to the under-fire coin Tuesday.
“We have an agreement to let them use our brand, but that’s not something that we created,” he said.
Binance chief Changpeng Zhao has downplayed the link between his exchange and a token carrying its branding that’s currently under fire from the Securities and Exchange Commission.
Zhao, who’s frequently referred to by his initials CZ, shrugged off the impact of the US watchdog’s latest move in its crypto crackdown after it ordered Paxos to stop minting a Binance-branded coin Tuesday.
“BUSD is not issued by Binance,” Zhao said during a Twitter Spaces. “We have an agreement to let [Paxos] use our brand, but that’s not something that we created.”
The SEC has told crypto firm Paxos to stop minting BUSD from February 21 onward because it has determined that the token fits its description of an unregulated security, according to a Wall Street Journal report published Sunday.
Paxos and Binance joined forces to launch BUSD in 2019. It’s a Binance-branded stablecoin that has a fixed value of $1 and is the seventh-largest cryptocurrency by market capitalization, according to CoinMarketCap.
Stablecoins became a major cause for concern amongst crypto investors during last year’s brutal sell-off after TerraUSD broke its dollar peg and plunged below $0.30 in May.
CZ said that Paxos’ holdings of cash reserves would mean any BUSD holders will be able to get their money back once the crypto firm stops minting the token – but added that the SEC’s latest move could be a blow for other dollar-pegged stablecoins.
“It’s an orderly wind-down, and that’s a good thing,” he said. “People holding BUSD should not lose or be expected to lose any value.”
“The amount of pressure put onto stablecoins is quite significant – there’s multiple agencies trying to apply pressure there,” he added. “I think this is just going to shrink the dollar-based stablecoin market, so we’re exploring what are the other options.”