BUSD falls to fourth position among stablecoins
The dollar-pegged Binance USD (BUSD) stablecoin sits now at the fourth position in market capitalization among other stablecoins following a dip of over $1 billion in the past 30 days, data from CoinMarketCap shows.
As of writing, BUSD market cap stands at $4.30 billion, down 29% from $5.54 billion on May 18. The stablecoin has been in a downward trend since December last year, when its market cap topped $23 billion.
The decline in BUSD market cap parallels major developments surrounding Binance following FTX's dramatic collapse in November 2022. Last December, a report indicating Binance would be targeted by the U.S. Department of Justice led to net withdrawals of $3.6 billion within seven days. The exchange saw large BUSD redemptions from market makers, including more than $245 million from Jump Finance.
A partnership between Binance and Paxos Trust created the BUSD stablecoin in September 2019. Paxos issues and owns the product, while Binance licenses its brand. For Paxos, the partnership brought new challenges. In February, the company was reportedly served a Wells Notice from the U.S. Securities and Exchange Commission alleging that Binance USD was an unregistered security.
Related: Stablecoins 101 - What are crypto stablecoins, and how do they work?
The investigation led the New York Department of Financial Services (NYDFS) to order Paxos to stop the issuance of BUSD. Together, these episodes took a significant bite out of BUSD's market share, from $15.88 billion on February 12 to $8.38 billion on March 13.
The most recent blow came from the SEC lawsuit against Binance on June 5 for allegedly offering unregistered securities. The U.S. regulator pressed 13 charges against the exchange, including unregistered
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