Type to search

Binance Stablecoin Chalks up $6bn of Outflows After Crackdown

Investors have been cashing in their Binance USD tokens since the US Securities and Exchange Commission said it was considering taking action against the platform

Binance users traded crypto assets worth $90 billion in a single month in China, despite a ban imposed on such trading in 2021, according to the Wall Street Journal.
China allegedly accounts for 20% of the company's worldwide volume, past and present staff have claimed. File photo: Reuters.


Binance’s stablecoin has clocked up about $6 billion worth of outflows this month in the wake of a US regulatory crackdown, according to market tracker CoinGecko.

The investor exodus came after Paxos Trust Company, which issues Binance USD, was warned by the US Securities and Exchange Commission (SEC) that it should have registered the product as a security and it was considering taking action against the platform.

On the same day, February 13, New York’s chief financial regulator said in a consumer alert that it had ordered Paxos to stop creating the token. 


Also on AF: China’s Xi Jinping Eyes Return of Party’s Own Financial Watchdog


An NYDFS spokesman later said that Paxos violated its obligations for “tailored, periodic risk assessments” and due diligence checks on Binance and Binance USD customers needed to stop “bad actors from using the platform”.

On Wednesday, the value of all Binance USD was around $10.5 billion, down from $16.1 billion on February 13, reported CoinGecko.

Analysts said the NYDFS move represented a setback in Binance’s efforts to gain market share from larger stablecoins.

SEC chairman Gary Gensler has previously said he believes some stablecoins to be securities.


  • Reuters with additional editing by Sean O’Meara


Read more:

Tether Gains After Investors Pull $2.5bn from Binance Coin

Binance CEO Calls for Clearer Rules to Stabilise ‘Crazy’ Sector

Crypto Sector Shaken by FTX Collapse, Binance Takeover




Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


AF China Bond