Complained by rival circle, Binance USD reserve problem: Bloomberg | coindesk JAPAN | Coindesk Japan

The New York State Department of Financial Services (NYDFS) is investigating stablecoin issuer Paxos. Rival Circle reportedly filed a complaint with authorities.

According to Bloomberg, Circle will inform the NYDFS in the fall of 2022 that blockchain data indicates that Binance USD (BUSD), a stablecoin issued by Binance through Paxos, will have sufficient reserves to back it up. It is said that he complained that it became clear that he was not. Bloomberg reported on February 13, citing statements from those involved.

A NYDFS spokesperson told Reuters on the 13th that Passos does not manage BUSD in a “safe and sound” manner and therefore “does not provide appropriate protection to BUSD customers to prevent bad actors from using the platform.” , in breach of its obligations to conduct regular risk assessments and due diligence.”

NYDFS ordered Paxos to suspend the issuance of BUSD, and Paxos agreed to the suspension. However, in a press release issued on the 13th, it said that all BUSD it issues is fully backed by reserves denominated in U.S. dollars.

CoinDesk has reached out to The Circle for comment, but has yet to hear back.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Image: Shutterstock
｜Original: Circle Sounded Alarm on Paxos, Told NYDFS Binance’s Stablecoin Wasn’t Fully Backed: Bloomberg