- Binance’s CZ announced a major cryptocurrency buyout.
- The move comes as Binance removes remaining BUSD from the industry recovery fund.
- The exchange took advantage of BUSD from the fund only once before on Monday.
Binance is on a cryptocurrency buying spree as it dumps its remaining controversial BUSD stablecoin.
Binance will transfer about $1 billion in industry recovery funds from Binance USD (BUSD) to other cryptocurrencies, including BTC, BNB, and ETH.
The move comes after regulators in New York banned stablecoin issuer Paxos from creating any new BUSD.
Why Binance Moved 850 Million From the Redemption Fund
On Monday, the CEO of Binance Changpeng (CZ) Zhao Twitter about a major transfer of ERC-20 tokens. The exchange is liquidating the remaining BUSD coins after New York regulators banned their issuance.
“Given the changes in stablecoins and banks, Binance will convert the remaining of the $1 billion Industry Recovery Initiative funds from BUSD to native crypto, including BTC, BNB and ETH,” CZ said.
Given the changes in stablecoins and banks, # Finance It will convert the remaining BUSD 1 billion Industry Recovery Initiative funds into native crypto, incl #BTCAnd #BNB and ETH. Some money movements will happen on-chain. Transparency.
– Czechoslovakia 🔶 Binance (cz_binance) March 13, 2023
Czechoslovakia said the transfer took 15 seconds and cost $1.29. “Imagine transferring $980 million through a bank before banking hours on Monday,” he added.
On-chain data shows that Binance has moved to 985 million BUSD Tokens from the industry’s redemption wallet to its exchange wallet.
From there, Binance is supposed to redeem these tokens with Paxos, their original issuer. According to Paxos, the stablecoin issuer is holding it 100% of its reserves cash and treasury bonds. Then, Binance can take the funds and convert them into crypto assets.
Are Bitcoin, Ethereum, and BNB Surging on Binance News?
According to the Binance CEO, Binance will convert the BUSD assets into Bitcoin, Ethereum, Binance Coin (BNB) and other tokens. Bitcoin, Ethereum, and BNB Prices Up 10% After the declaration of Czechoslovakia. However, it is unclear whether or not the price action is related to the Binance acquisition. For one, most of the other major coins rose on Monday.
It is also important to note that Binance has not yet bought cryptocurrencies. It is also unclear whether the size of the acquisition justifies the 10% price increase.
To put things in perspective, bitcoin has a market cap of $395 billion. If Binance converts 40% of its holdings from BNB to Bitcoin, that would amount to 0.1% of the total Bitcoin supply.
CZ did not specify how much Binance will buy of each of the $985 million worth of tokens. Bitcoin and Ethereum are the two largest tokens by market cap, while BNB is the native token of the Binance exchange.
How did Binance use its funds to recover the BUSD industry?
Binance just pulled out of the file billion US dollars Industry Recovery Fund once since its inception. The move coincided with the acquisition of a struggling Korean stock exchange.
On-chain data shows that the exchange Withdraw 14.9 million BUSD from the wallet on February 3, 2023. On that day, Binance announced the acquisition of Korean crypto exchange GOPAX. Binance has not made public the terms of the acquisition. However, the exchange specified that it invested through the Industry Recovery Initiative.
This was the first and last transfer of US dollars from that portfolio before it was liquidated. On February 13, the organizers of the state of New York Paxos has been ordered to stop issuing BUSD.
Following the news, Binance has tried to distance itself from the stablecoin. This is despite Binance previously saying it was created Binance USD (BUSD) In association with Paxos. The Binance CEO has acknowledged that the exchange will gradually move away from using BUSD.
on the flip side
- Binance’s move to liquidate the remaining BUSD highlights lingering regulatory skepticism about stablecoins.
- While it is unclear if this move will affect Bitcoin and Ethereum, it is likely to affect BNB. The market capitalization of the Binance token is $46 billion.
Why should you bother
The move caught the attention of investors, with some speculating that it is a bullish sign for the cryptocurrency.
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