According to Brian Armstrong, CEO of Coinbase, the exchange chose to halt trading in Binance USD (BUSD) because it was apprehensive about the currency’s liquidity.
The cryptocurrency exchange had previously stated that the delisting of BUSD was due to the stablecoin no longer meeting its listing standards as determined by its own internal monitoring and review procedures. Coinbase made no further explanations available.
Armstrong spoke on Bloomberg TV on Wednesday morning and provided a more thorough justification for the decision.
As Paxos, the company that issues BUSD, had been instructed to stop minting it, Armstrong explained that the decision was made out of concern for the clients’ access to liquidity.
Due to unresolved problems with Paxos’ monitoring of its business connection with Binance, the New York Department of Financial Services (NYDFS) has ordered Paxos to stop minting the Binance-branded BUSD. Also, Paxos was allegedly going to face legal action from the Securities and Exchange Commission for offering BUSD as an unregistered security.