The value of the BNB Chain’s native token took a 7% decrease in the past 24 hours, associated with an influx of Binance USD (BUSD) stablecoins to cryptocurrency exchanges in response to news concerning potential legal issues facing the issuer of BUSD, Paxos, in the U.S.
The BNB token saw an almost 7% decrease in its price on Sunday, with it trading at $315 before sliding to around $290 in the span of 24 hours. This was the most significant decline for a major cryptocurrency, with bitcoin and ether losing a bit less than 3%.
Futures listed on BNB experienced a moderate $2.5 million in liquidations, according to CoinGlass’s statistics, suggesting that the majority of these sales were a result of spot traders.
In the past 24 hours, CryptoQuant reported that $52 million in BUSD had been sent to exchanges. CryptoQuant also noted that when any token is sent to exchanges in large amounts, it usually indicates a bearish sign and could lead to traders disposing of their tokens.
CryptoQuant noted in its data guide that, rather than hoarding them away, relocating coins to exchange wallets indicates an impulse to change them into fiat or stablecoins.
CryptoQuant noted that the inflows could signify that stablecoins are being utilized as collateral for futures trades or to rearrange their overall portfolios.
A total of $52 million in cryptocurrency was transferred to trading platforms over the span of a single day, according to CryptoQuant.
Hochan Chung, the head of marketing at CryptoQuant, communicated with CoinDesk via Telegram and suggested that the recent inflows may be connected to the apprehension concerning possible BUSD redemptions, motivated by prior issues with FTX and Genesis.
Chung highlighted the fact that following Changpeng Zhao’s Monday tweet, wherein the Binance founder addressed worries about reserve backing, the negative netflows decreased. He also mentioned that both Binance and Paxos guarantee that redemption will be handled without any problems.
A Wall Street Journal article on Sunday revealed that the U.S. Securities and Exchange Commission accused BUSD of not being a registered security. This came shortly after CoinDesk had reported that the New York Department of Financial Services was conducting an investigation on Paxos, though the extent of the inquiry is unknown.
The Paxos organization has released two digital assets: the Pax Dollar (USDP) and the Binance USD (BUSD). BUSD is a stablecoin with Binance’s branding. Binance communicated to CoinDesk on Monday that BUSD is owned and managed by Paxos, and thus its market capitalization will continue to decrease.
The spokesperson for Binance declared that Paxos had ensured the funds were safeguarded and completely backed up with reserves in their banking institutions.
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