In response to the controversy surrounding the USDC stablecoin, Binance, the world’s largest cryptocurrency exchange, has converted its $1 billion Industry Recovery Initiative funds into Bitcoin (BTC), Ethereum (ETH), and BNB (Binance Coin).
Binance’s Recovery Fund was launched in November 2022 following the FTX exchange’s collapse, aiming to assist projects that are strong but experiencing liquidity crises. However, given the changes in stablecoins and banks, Binance CEO Chanpeng Zhao tweeted that the exchange will convert the remaining funds into native cryptocurrencies like BTC, BNB, and ETH.
US SEC Lawsuit Against Paxos
Paxos, the owner and issuer of BUSD, has been hit by a lawsuit from the United States Securities and Exchange Commission (SEC), which claims that the company violated investor protection laws. As a result, Paxos announced it would halt BUSD minting and “end its relationship with Binance,” for the stablecoin.
Also Read: Binance USD (BUSD) Stablecoin Halted by NY Regulators
It remains unclear how much money has been converted from Binance’s fund or earmarked for conversion into the aforementioned cryptocurrencies. However, some substantial transfers have been made to the ETH address shared by CZ, with the original wallet almost emptied at the time of writing.
Binance started auto-converting USDC deposits into its native BUSD last September, effectively delisting the rival stablecoin. The move to convert the remaining Industry Recovery Initiative funds into crypto is likely part of Binance’s efforts to distance itself from BUSD and Paxos, given the recent SEC lawsuit.
