Foreign media: Circle reported to NYDFS that Binance did not have enough reserves to support its BUSD tokens

It is reported that Circle reported to the New York Financial Services Department (NYDFS) in the fall of 2022, complaining that the blockchain data showed that Binance did not have enough reserves to support its BUSD tokens issued through Paxos. NYDFS spokesman told Reuters that Paxos did not manage BUSD in a “safe and reliable” way, so “it violated its obligation to conduct customized regular risk assessment and due diligence updates for the BUSD customers issued by Binance and Paxos” to prevent bad actors from using the platform. ” NYDFS instructed Paxos to stop casting BUSD. Paxos agreed to stop casting new BUSD tokens, but said in a press release released on Monday that all its issued BUSD tokens were fully supported by reserves denominated in US dollars. It was also reported that Paxos denied the rumor that the United States Office of the Comptroller of the Currency (OCC), the federal banking regulator, might require Paxos to withdraw its application for a full banking license (Paxos received the OCC’s provisional banking license in 2021). (Bloomberg)

Interpretation of this information:

The message reports that Circle complained to the NYDFS in the fall of 2022, alleging that Binance did not have enough reserves to support its BUSD tokens issued through Paxos. The NYDFS found that Paxos did not manage BUSD in a “safe and reliable” way, violating its obligation to conduct regular risk assessments and due diligence updates for BUSD customers. As a result, NYDFS instructed Paxos to stop casting BUSD. Paxos agreed to stop casting new tokens, but stated that all issued BUSD tokens were fully supported by reserves in US dollars. Moreover, Paxos denied the rumor that OCC might require it to withdraw its application for a full banking license.