HomeNewsBinance's BUSD Sees Significant Supply Drop, Legal Woes Deepen

Binance’s BUSD Sees Significant Supply Drop, Legal Woes Deepen

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  • Binance’s stablecoin BUSD has witnessed a drastic decline in market cap, with supply falling below 1 billion.
  • BNB’s network activity and revenue have also experienced notable downturns, amid legal challenges for CEO Changpeng Zhao (CZ).

Binance’s Stablecoin and Network Under Pressure

In what marks a challenging phase for Binance, the leading cryptocurrency exchange has seen its stablecoin BUSD undergo a significant market downturn, impacting the broader BNB network.

The Sharp Decline of BUSD

Binance’s BUSD, once a robust player in the stablecoin sector, faced a sharp decline in its market cap on January 7th. The stablecoin’s supply plummeted below 1 billion, marking a dramatic 95% drop from its peak of 23.45 billion. As of now, BUSD ranks as the sixth-largest stablecoin, falling behind FDUSD, USDT, USDC, and DAI in market size.

Network Troubles for Binance

The BNB network, associated with Binance, has not been immune to these troubles. Network activity suffered a significant 66.4% decline over the past week, while network revenue dipped by 13.7%. These figures reflect a worrying trend in user engagement and transactional throughput within the BNB ecosystem.

Legal Hurdles and Market Response

Compounding Binance’s challenges, CEO Changpeng Zhao (CZ) faced legal repercussions from the U.S. Commodity Futures Trading Commission (CFTC). The settlement resulted in a $150 million civil penalty for CZ and required Binance to disgorge $1.35 billion in fees. Former Chief Compliance Officer Samuel Lim incurred a $1.5 million penalty, and the court mandated the establishment of a corporate governance structure.

Despite these hurdles, Binance continued to launch new projects on its BNB network, demonstrating resilience amid adversity.

BNB’s Market Performance

In the wake of these developments, BNB’s market performance has been less than favorable. The token traded at $295.72, marking a 4.17% decline over the last 24 hours. The trading volume also experienced a downturn, despite a recent spike in demand possibly linked to the Spot Bitcoin ETF approval hype.

Navigating the Challenges Ahead

As Binance navigates through these multifaceted challenges, the stability and performance of its stablecoin BUSD, along with the engagement and economic activity on the BNB network, will play crucial roles in shaping its future trajectory in the crypto market. The resolution of legal issues and the recovery of market confidence are key factors that will determine Binance’s path in 2024.

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AnnJoy Makena
AnnJoy Makenahttps://www.ethnews.com
Annjoy Makena is an accomplished and passionate writer who specializes in the fascinating world of cryptocurrencies. With a profound understanding of blockchain technology and its implications, she is dedicated to demystifying complex concepts and delivering valuable insights to her readers. Business Email: info@ethnews.com Phone: +49 160 92211628