Binance, one of the world's largest cryptocurrency exchanges, has suffered a significant outflow from its stablecoin, BUSD. According to reports, over $500 million in outflows was seen following the lawsuit brought by the US Commodity Futures Trading Commission (CFTC) against Binance.
The CFTC filed a lawsuit alleging that Binance had violated regulations related to trading and futures markets. The regulator claims that Binance had allowed US customers to trade on its platform without registering with the agency.
Following news of the lawsuit, users began pulling their funds from BUSD. However, despite the large outflow, industry experts say that the impact on BUSD was comparatively limited when compared to Paxos' stablecoin last month.
Last month, Paxos' stablecoin saw over $1 billion in outflows following similar regulatory action by the New York Attorney General's office against rival exchange Bitfinex. Industry analysts suggest that this is because BUSD is not as widely used as Paxos' stablecoin.
Despite this relative resilience shown by BUSD in comparison to other cryptocurrencies affected by regulatory action recently; it remains unclear what will be next for Binance and its future prospects as regulators continue to crack down on crypto exchanges across multiple jurisdictions worldwide.
In response to these challenges facing them now more than ever before - many companies are looking towards new ways of building trust within their communities such as partnering with third-party auditors or creating transparency reports detailing how they handle customer funds securely - all aimed at demonstrating compliance standards are met while simultaneously staying ahead of competition amidst increasing scrutiny from regulators globally.