Bans on Paxos caused record cash outflows at Binance; SEC and NYSDF impose a BUSD issuance ban on Paxos; January CPI inflation rate slows to 6.4% but monthly inflation rose by 0.5%
Things could be better at Binance, the world’s largest cryptocurrency exchange in terms of trading volume. On Binance, withdrawals have seen a massive increase in the last 24 hours. This was due to US regulators’ sanctions on Paxos and its stablecoin, Binance USD.
According to data from blockchain analysis platform Nansen, a cash outflow of $778.5 million has occurred in Binance in the last 24 hours.
As it is known, the Mazars company, which controls Binance’s reserves, stopped serving Binance on December 17. The stock market was also exposed to large cash outflows at that time. However, in the last 24 hours, Binance has seen the biggest cash outflow since December 17.
In addition to all this, a spokesperson from Binance said that they have handled the last 12 hours of cash out very well.
SEC and NYSDF impose a BUSD issuance ban on Paxos
It all started on February 10 when the New York Department of Financial Services (NYDFS) immediately banned stablecoin issuer Paxos from issuing Binance USD and put it under investigation. Although it is not known why Paxos was banned from exporting after the first ban, the knots were later untied.
According to the later statements, it was revealed that US regulators put Paxos under scrutiny and banned it from issuing BUSD, alleging that Binance USD is a security. However, the statement from Binance CEO Changpeng Zhao on the subject was not delayed.
Zhao assured that BUSD was issued by Paxos and that the funds are safe. In addition, Binance CEO underlined that Paxos will continue to provide services for the product. Zhao reported that if BUSD is ruled as a security by the courts, it will have profound effects on how the crypto industry can and cannot thrive in various jurisdictions.
January CPI inflation rate slows to 6.4% but monthly inflation rose by 0.5%
US inflation data, which is extremely important for global markets, has been announced. According to the announced data, inflation took place at the level of 6.4%. Economists’ expectation was 6.2%.
The data on the labor market announced last month caused inflation concerns in the country to increase. The higher-than-expected inflation increased the likelihood that the Fed would continue its policy of increasing interest rates.
The Fed has been raising interest rates for a long time. According to FOMC minutes, the institution will continue its aggressive stance until it reaches its 2% inflation target.
Bitcoin’s volatility increased after the US announced inflation data. Bitcoin has reached $22,000 again. However, altcoins took a breather and started to rise.