- There has been a 29% drop from May 18’s $5.54B market value to today’s $4.3B.
- Tether (USDT) is leading the way while other stablecoins continue to decline.
CoinMarketCap data reveals that the U.S. dollar-pegged BUSD stablecoin has dropped to fourth place in market capitalization among other stablecoins, having lost more than $1 billion during the last 30 days.
There has been a 29% drop from May 18’s $5.54B market value to today’s $4.3B valuation of BUSD. Since December 2022, when the stablecoin’s market valuation reached over $23 billion, it has been on a declining trajectory.
SEC Crackdown Effect
Following FTX’s catastrophic drop in November 2022. Big changes have occurred around Binance, which have coincided with the decrease in BUSD’s market valuation. Net withdrawals of $3.6 billion occurred within seven days after a report in December 2022 indicated the U.S. Department of Justice might pursue Binance. Large amounts of BUSD were redeemed from the exchange by market makers. With over $245 million coming from Jump Finance alone.
The BUSD stablecoin was launched in September 2019 as a result of a collaboration between Binance and Paxos Trust. The stablecoin is issued and owned by Paxos, whereas Binance has a license to use its name.
Paxos faced further difficulties as a result of the relationship. The U.S. Securities and Exchange Commission allegedly sent a Wells notice to the business in February, asserting that BUSD was an unregistered security.
New York’s Department of Financial Services ordered Paxos to halt BUSD issuance after conducting an inquiry. As a result of these events, BUSD’s market share plummeted from $15.88 billion on February 12 to $8.38 billion on March 13.
The SEC’s complaint against Binance for allegedly marketing unregistered securities on June 5 was the latest blow. Unregistered offers and sales of BNB and BUSD tokens are among the 13 complaints brought against the exchange by the U.S. regulator.
Over the last year, there have been shifts in the market domination of stablecoins tied to the U.S. dollar, with Tether rising to a new all-time high even while the market capitalization of other stablecoins fell.
