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by codesuela 1219 days ago
Binance doesn't have to come up with anything, it is a white label solution managed by Paxos.
2 comments
ElfinTrousers 1219 days ago
Does that make the $16 billion hole go away?
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qeternity 1219 days ago
Sort of - there are two versions of BUSD that people use interchangeably.

Paxos issues one, and Binance issues the other.

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lxgr 1218 days ago
Are you sure about that, and if so, do you have any sources?

I'm almost certain that there's only BUSD [1], issued by Paxos. What would be the other version?

[1] https://etherscan.io/token/0x4Fabb145d64652a948d72533023f6E7...

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Jommi 1218 days ago
Your misconception is the exact reason SEC took this action:

There are two different BUSDs, one by Paxos on the Ethereum netowrk and one is a BUSD based derivative on other chains such as BSC.

https://www.binance.com/en/blog/ecosystem/understanding-busd...

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lxgr 1218 days ago
Very interesting, do you have any sources on this being the reason for SEC's actions?

As far as I understand this, this is "just" wrapping/bridging – "just" in quotation marks because that often does carry counterparty risk if not done in a trustless way.

Is the issue that Binance is acting as a secondary custodian (holding Ethereum BUSD, issuing BSC BUSD) for a Paxos-issued (holding USD, issuing Ethereum BUSD) asset, and that that activity is not regulated by the NYDFS?

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Jommi 1217 days ago
I beleive the latest reports now include specification that the issue is with the Binance pegged BUSD.

>Is the issue that Binance is acting as a secondary custodian (holding Ethereum BUSD, issuing BSC BUSD) for a Paxos-issued (holding USD, issuing Ethereum BUSD) asset, and that that activity is not regulated by the NYDFS?

yes

to make matters worse, AFAIK there is also revenue share beteween the two

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