Regulatory action against Paxos and Binance over their dollar-pegged stablecoin partnerships has spooked investors.
Following yesterday’s crackdown by the SEC and the New York Department of Financial Services, Binance’s native token BNB fell more than 5.3% before recovering in today’s data.
Traders have also massively withdrawn funds from crypto exchanges. Data aggregated by Nansen indicates that over the past 24 hours, a net amount of $356 million has fled the exchange amid recent regulatory scrutiny. This rate increases almost four times a week.
BNB is an exchange token that allows holders to enjoy reduced trading fees and benefits for exchange users.
The exchange’s token is trading at $291.48 on CoingGecko, down from $302 yesterday. BNB has had a rough week, falling 10.4% in the last seven days.
Based on overnight selloffs, BNB leveraged traders broke out to $2.10 million.
BNB remains one of the five largest cryptocurrencies by market capitalization, with a total value of over $45 billion.
Yesterday, Paxos and Decrypt confirmed that the SEC plans to sue cryptocurrency companies for violating investor protection laws. The SEC also claims that the Binance USD stablecoin is an unregistered security.
Launched in 2019, the assets backing the Binance-branded stablecoin are held by Paxos and held primarily in coins and US Treasuries.
The suspension will take effect on February 21, but the company said that BUSD will remain fully supported by Paxos and redeemable for onboard users until at least 2024.
DeFi Crypto Tokens
Cryptocurrency prices were relatively mixed on Tuesday. The BNB coin price continued to sell off amid regulatory concerns after Paxos stopped mining BUSD. MATIC, SHIB and SAND fell 3.3% in the last 24 hours.
A closer look at the major coins of the day shows that the majority are in the decentralized finance arena. The Hashflow price has increased by 26.8% in the last 24 hours.
Hashflow is an upcoming DEX that allows users to trade assets across multiple blockchains like Optimism, Polygon, Ethereum, and Avalanche.
Meanwhile, the GMX price rose 13.3% over the same period. GMX is a DEX that is relatively different from Hashflow. It allows users to trade perpetual futures contracts and other assets.
Another top DEX that is doing well is CRV, a token native to the Curve DAO ecosystem. The CRV price increased by 12% due to the increasing trend of inputs to the ecosystem. Additionally, other DeFi tokens, AAVE, Maker’s MKR, and Lido DAO, were up 5.5%.
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