BUSD – Binance USD (Issued by Paxos, on behalf of Binance)
1. Overview
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Stablecoin: BUSD
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Issuer: Paxos Trust Company for Binance
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Blockchain: Ethereum (ERC‑20), BNB Chain, Avalanche, Polygon, Solana, and more
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Launch: September 2019
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Type: Fiat-backed, centralized (redeemable 1:1 for USD)
2. Use Case
BUSD is designed for:
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High-throughput trading liquidity on Binance and other major exchanges
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Cross-platform transfers across Binance’s multi-chain ecosystem
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On/off-ramps for decentralized finance through wrapped versions
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Acting as one of three “Wall Street-approved” stablecoins alongside PAX and GUSD
3. Governance & Compliance
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Issued by licensed Paxos, a NYDFS-regulated trust company
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Historically backed by New York DFS approval
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Paxos was later ordered by NYDFS to cease minting BUSD due to oversight failures (NYDFS order)
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SEC filed a Wells notice, asserting BUSD resembles a security—dismissed in court, but remains under scrutiny (Decrypt report)
4. Customer Feedback & Reputation
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No retail reviews or Trustpilot ratings
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Regulatory controversy: BUSD has been criticized for under-collateralization and regulatory concerns (Circle complaint)
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Market pullback: Supply has collapsed from ~$23 B to under $2 B after NYDFS actions (CryptoSlate stats)
5. CU Background Check
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NYDFS intervened in early 2023, citing inadequate Paxos oversight
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Paxos received a Wells notice from the SEC, later dismissed for BUSD but highlighting ongoing risk
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BUSD remains central in Binance legal cases involving SEC, DOJ, and NYDFS scrutiny
6. Crypto‑Economics
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Minted and redeemed via Paxos at 1:1 in USD
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Peg maintained through fiat reserves, redeemed via Paxos/banks
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Circulating supply fell from ~$23 B to ~$1.9 B (June 2025) (CoinMarketCap data)
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High liquidity across Binance ecosystems; multi-chain utility remains strong
7. Backing & Value Stability
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Reserves held per Paxos reports: USD cash and treasuries
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Transparency issues: circle flagged under-collateralization; later records show more than 1:1 reserves (Messari overview)
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Regulatory stoppages raised questions about consistency of backing
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Despite supply decline, Binance reports over 200% PoR coverage for BUSD, suggesting current holdings exceed liabilities (Binance PoR report)
8. Final CyberFinance Compliance Rating
| Category | Rating | Notes |
|---|---|---|
| Authorization | 🔴 RED | NYDFS halted minting; SEC oversight continues |
| Transparency | 🟠 ORANGE | Some public reserve data, but flagged as under-collateralized historically |
| Client Feedback | 🔴 RED | No consumer reviews; regulatory alerts & distrust |
| Financial Soundness | 🟠 ORANGE | Large reserves today but structural confidence undermined by regulatory actions |
⚠️ Final Rating: ORANGE–RED SIGNAL
BUSD remains widely used, but persistent regulatory challenges and historical transparency gaps significantly impact its credibility. Use with caution—especially for compliance-sensitive or institutional contexts.
📌 Ratex42 Summary
Despite declines in supply and ongoing legal scrutiny, BUSD still operates with significant liquidity. However, its compliance concerns and oversight irregularities mean it’s far below institutional standards and should be monitored closely.
