In the latest developments, the US SEC has instructed Paxos to halt the issuance of Binance USD, which is the known for being the third-largest stablecoin.
BUSD has earned this rank in terms of third-highest market valuation in the stablecoin market.
On the flipside Tether’s USDT has experienced a resurgence in its market capitalization, reaching almost $70 billion.
As SEC has decided to impose a ban on Paxos and restrained Paxos from issuing the Binance BUSD, this has given much momentum to its rival stablecoin Tether.
According to the SEC, the stablecoin known as BUSD, which is backed by the U.S. dollar, is considered a security.
As per SEC officials, Paxos white-labeling BUSD is a violation of the legal provisions which protect investors’ money.
As The Result Market Cap of BUSD Diminishes by $2Billion
SEC’s action against Paxos made the headlines back on Feb.13. But as of now the market cap of BUSD has declined by $2Billion over the past three to four days.
BUSD’s current market cap is $14 billion, the lowest since January the last year.
According to a report by Cointelegraph, there has been a notable increase in withdrawals and BUSD redemptions on the Binance blockchain.
The reason behind this rapid asset withdrawal is the upcoming crackdown against Paxos.
The Market Cap of USD Consistently Plunges
Amid the SEC crackdown against stablecoins, the world’s second-largest stablecoin USDC also sees a slump in its overall market supply.
Between February 12 and February 14, there was a decline in supply for the USDC, causing its total value to drop from $41.29 billion to a low of $40.99 billion.
However, USDC regained its market supply to $41.30 billion on Feb. 15 as there was no lawsuit threat from the SEC.
Tether Emerges as the Biggest Winner, Its Market Cap Touches $69 Billion
The increased regulatory pressure on a U.S.-based stablecoin company has proven to be beneficial for Tether.
The market cap of Tether has gone all the way up to $69 billion. From Feb.12 to now, the stablecoin has seen a gain of $890 in its current market supply.
It can be argued that investors lost trust in BUSD and put their trust in Tether.
Tether was developed by the Hong Kong-based crypto firm known as iFinex, the same firm also owns the renowned crypto exchange Bitfinex.
But it is also important to mention that regulators and investigators are also after Tether as they claim that the cryptocurrency is not fully backed by USD.
Addressing these speculations, the senior management of Tether has categorically denied these allegations on a couple of occasions.
As of December 31, 2022, the consolidated assets of the organization totaled at least $67 billion, surpassing the consolidated liabilities by a minimum of $960 million.