Binance Coin Falls To Lowest Since Mid-January After Regulatory Intervention

Binance coin, which trades under the ticker symbol BNB, declined to its lowest value in over a month after markets responded to the latest regulatory developments.

The digital token, which serves as the native cryptocurrency of Binance’s BNB Chain, fell to $283.20 this afternoon, according to TradingView.

At this point, the digital currency was trading at its lowest since January 12, additional TradingView data shows.

Since then, binance coin has recovered somewhat, trading close to $290.00 at the time of this writing.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

When explaining these price fluctuations, analysts repeatedly cited the latest news surrounding regulatory developments, along with the challenges being faced by Binance, one of the world’s largest cryptocurrency exchanges.

This morning, cryptocurrency firm Paxos, the company behind Binance’s stablecoin binance USD, announced that as of February 21, it will no longer mint new units of this digital currency.

The cryptocurrency firm revealed that it would make this change “as directed by and working in close coordination with the New York Department of Financial Services (NYDFS).”

The NYDFS also spoke to the situation, issuing a consumer alert indicating that it had ordered the company to stop minting new units of binance USD, a stablecoin that is pegged to the U.S. dollar and trades under the symbol BUSD.

Also this morning, binance USD lost its peg to the U.S. dollar, according to a CoinDesk article citing figures from data provider Kaiko.

Later today, Paxos revealed in a statement that it had received a Wells Notice from the U.S. Securities and Exchange Commission, which indicated that the government agency might allege BUSD is in fact a security.

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Paxos responded to the receipt of this notice, stating that “Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws.”

Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, commented on how these developments affected investors.

“The market took news of SEC’s action against Paxos and the subsequent banning of minting new BUSD negatively,” he stated.

Binance Concerns

Several other analysts offered similar assessments of how these regulatory developments had a negative impact on binance coin, but they also emphasized how concerns surrounding Binance have affected the digital currency.

“Binance has been under pressure from the public ever since the FTX collapse,” said Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management.

“BNB and Binance seem to be in the microscope of the public and their halting of USD withdrawals caused some investors to worry about the health of the company.”

Tim Enneking, managing director of Digital Capital Management, also commented on this situation.

“While BUSD and BNB are certainly ‘affiliated’ with one another, it does not stand to reason that the de-pegging and/or disappearance of BUSD would have a major, negative effect on BNB,” he said.

“It seems more that investors are becoming more risk averse with respect to the ‘Binance ecosystem’ and are reducing their exposure just in case,” Enneking stated.

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.