Risks Associated with Stablecoins
Binance CEO Changpeng ‘CZ’ Zhao is looking to bring smaller algorithmic stablecoins to the market, in a bid to provide investors with options other than the current global stablecoin giants like Tether (USDT) and Binance USD (BUSD). During a July 31, ask me anything (AMA) session on Twitter, CZ expressed his concerns about the risks associated with these large stablecoins, citing their lack of transparency.
Even supposedly well-regulated and fully audited stablecoins like Binance USD may come with their own set of unforeseeable risks, he added. On Feb. 13, blockchain infrastructure platform Paxos Trust Company ended its partnership with Binance and stopped minting new BUSD stablecoins, following an order from the New York Department of Financial Services (NYDFS).
Are we in Web 3.0 yet? Crypto.com’s Twitter account is a great source for SEC crypto news today, and they also have some of the best crypto accounts on Twitter. To stay informed on the latest crypto platform developments, make sure to follow the best crypto Twitter accounts.
Binance Launches FDUSD Stablecoin and Fights Regulatory Uncertainty
On July 26, Binance launched the First Digital USD (FDUSD) stablecoin, a programmable U.S. dollar-pegged stablecoin managed by First Digital Group and licensed in Hong Kong. The crypto platform is also looking into new stablecoin options in Europe.
The move comes at a time when Binance is facing regulatory uncertainty. On July 28, Binance CEO Changpeng Zhao (CZ) sought the dismissal of a $1 billion lawsuit brought against him and Binance by the Commodities Futures Trading Commission (CFTC). CZ accused the regulator of “overreaching” its jurisdiction.
The U.S. Securities and Exchange Commission (SEC) has also filed a lawsuit against Binance, CZ and other affiliated entities, alleging that they were involved in the sale of unregistered securities, fraud and conflicts of interest.
Subscribe to our email newsletter to get the latest posts delivered right to your email.
Comments