According to TechFlow, Bloomberg reported, citing people familiar with the matter, that Circle, the issuer of the stablecoin USDC, reported to the New York Department of Financial Services (NYDFS) last year that "the Circle team's analysis of blockchain data showed that Circle believed Binance did not store enough cryptocurrencies to support its own assets (including Binance-peg and B-Token)."

A NYDFS spokesperson said Paxos did not manage BUSD in a “safe and secure” manner and therefore “violated its obligation to conduct regular personalized risk assessments and due diligence on BUSD customers.”

Last month, a Binance spokesperson responded and confirmed that its reserve system had certain defects in history, but it has now been improved and there are no deficiencies.

Yesterday, the Wall Street Journal reported that the New York State Department of Financial Services ordered Paxos Trust Co. to stop issuing more BUSD tokens. According to Binance’s statement, Paxos will continue to manage BUSD redemptions.

As previously reported, Binance announced in September 2022 that in order to improve user liquidity and capital utilization efficiency, Binance will automatically convert users' existing USDC, USDP, TUSD stablecoin balances and new recharges into BUSD at a 1:1 ratio. This move ultimately reduced Circle's share in the stablecoin market. According to Coingecko data, as of noon Monday New York time, USDC circulation was approximately $40.9 billion, while BUSD circulation was approximately $15.9 billion. Original link