Binance Reserves Being Tested Again
Binance has been fighting a battle or the other over the past years. Last year, they were involved in a massive FUD that threatened their reserves and whole existence.
The new action which the SEC decided to take is severely affecting the reserves of the Binance exchange as Paxos has stopped the minting of new BUSD tokens. Since BUSD tokens make up a large chunk of Binance reserves, it has raised many concerns among investors, making them withdraw their funds and move them to other exchanges/wallets.
Walter Teng, vice president of digital asset research of market analysis firm Fundstrat, said that certain factors might determine whether Binance reserves are severely affected. He says, "Assuming Binance doesn't hold customer deposits 1:1, they might face withdrawal pressure. On-chain liquidity for BUSD has already dried up, making redemption of BUSD for U.S. dollars or an alternate stablecoin to then meet customer withdrawals as the only viable option."
