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What happened? On January 25, Binance stablecoin circulating supply fell to $15.4 billion, down $1 billion over the past week and $2 billion over the month. The decline in the indicator began in December 2022, when the net outflow of funds from the exchange for the week amounted to $1.9 billion. The latest decline in the capitalization of BUSD comes amid news about the erroneous storage of Binance client funds along with collateral. As of January 26, 14:10 Moscow time, the market capitalization of BUSD is $15.58 billion, the asset is trading at $0.9998.
BUSD is issued by New York-based fintech company Paxos Trust Company. The $1 price is supported primarily by guarantees that the asset is backed by cash and US Treasury bills in US bank reserves insured by the Federal Deposit Insurance Corporation (FDIC). Also approved by the New York State Financial Services Authority (NYDFS), BUSD is the third largest stablecoin by market capitalization.
What’s going on with Binance? On January 24, representatives of the exchange admitted that they mistakenly stored collateral and customer funds at the same address, without specifying when exactly the problem was discovered. According to Bloomberg, Binance has already begun moving collateral to separate collateral wallets. The company noted that all user assets held on the exchange were and remain 1:1 backed.
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