684 million BUSD burned for redemptions amid US regulatory scrutiny

Quick Take

  • After Paxos said it would cease issuing BUSD but continue honoring redemptions, at least 684 million BUSD was burned in exchange for U.S. dollar redemptions, on-chain data show.

Just over a day after it categorically denied regulator claims Binance USD (BUSD) is a security, Paxos has burned some 684 million of the stablecoin for U.S. dollar redemptions, on-chain data show.

Formerly an issuer of BUSD, Paxos ceased distributing the stablecoin after the company received a Wells notice from the Securities and Exchange Commission.

Dollar parity redemptions for BUSD will be supported through at least February 2024, Paxos said.

To facilitate redemptions, Paxos sends BUSD to a burner address, destroying the tokens, which initiates a smart contract-driven process that refunds U.S. dollars to users from the reserve underpinning the stablecoin.

Arkham Paxos BUSD burn

Transaction data from Arkham

An initial Paxos redemption to the tune of roughly $144 million in tokens a day ago was followed by additional tens of millions in redemptions, data from Arkham show.

Amid the redemptions the total supply of BUSD dipped below $16 billion to $15.81 billion.


© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.