Cryptocurrency prices were once again driven lower by regulatory developments, with Paxos and the New York Department of Financial Services going toe to toe and Binance suffering the consequences. 

Bitcoin was down 1.1% over the past day, trading around $21,600 by 9 a.m. EST, according to TradingView data. The leading crypto by market cap fell on the news that Paxos was ordered to stop issuing the BUSD stablecoin. It briefly fell below $21,500 before recovering, although it has yet to climb back above $21,750. 

BTCUSD chart by TradingView

Paxos announced it would stop issuing new BUSD stablecoins effective Feb. 21 on orders from the New York Department of Financial Services, a Binance spokesperson told The Block. The New York regulator said the order had arisen "as a result of several unresolved issues related to Paxos’ oversight of its relationship with Binance."

"It is important to note that the Department only approved the Paxos-issued BUSD on the Ethereum blockchain," the regulator said in a statement. "The Department has not authorized Binance-Peg BUSD on any blockchain, and Binance-Peg BUSD is not issued by Paxos."

Ether sold off sharply following the news, falling around 3.2%. Ripple's XRP slipped 3.8% in the past day, Cardano's ADA sank 4.1%, and Polygon's MATIC plunged 8.7%. Binance's BNB fell below $300, down 6%.

BNBUSD chart by TradingView

Paxos tokens avoided major sell-offs, while pax gold was trading around $1,822, down 0.2% over the past 24 hours. The pax dollar was at parity with the U.S., although it briefly traded below parity. 

"There is currently no restriction on the listing or exchange in New York of existing Paxos-issued BUSD by DFS-licensed entities," New York's DFS added in the statement. "The Department is monitoring Paxos closely to verify that the company can facilitate redemptions in an orderly fashion subject to enhanced, risk-based, compliance protocols."