BNB price fell by 10% amid negative news about BUSD

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Binance Coin price dropped amid news about Paxos and its stablecoin BUSD
BNB traded to lows of $284, extending daily declines from highs of $321 as uncertainty engulfed the stablecoin.
Paxos, which issues and handles BUSD redemptions, has announced that it has discontinued its relationship with Binance.

Binance’s native coin, BNB, extended its daily losses to more than 10% as price action continued to suffer from negative news.

BNB Price Drops 10% Amidst BUSD Reports

As mentioned earlier, Binance Coin fell nearly 6% in the morning as the market reacted to news surrounding Binance USD (BUSD), a stablecoin owned and issued by US-regulated Paxos Trust.

But BUSD is the main stablecoin in the Binance ecosystem and the news that Paxos has stopped issuing any new tokens has led to massive inflows from abroad. The negative sentiment increased as the US Securities and Exchange Commission (SEC) filed a lawsuit against Paxos, which announced later in the day that it had terminated its relationship with Binance over the brand’s association with BUSD.

This is a chart by a market analyst showing a previous reaction to the news.

Binance Coin BNB Drops >8% After New York Regulator Orders Paxos Trust To Stop Creating More Of Its Business #BUSD Code. BUSD is a stablecoin backed by the US dollar, created in 2019 in partnership between crypto platform Binance and blockchain comp Paxos. BNB is a Binance token pic.twitter.com/TXu514EEQ6

– Holger Zschaepitz (Schuldensuehner) February 13, 2023

While Binance CEO Changpeng Zhao announced that the exchange will continue to support the stablecoin, he acknowledged that there will be migrations to other stablecoins as a result of regulatory uncertainty.

Monday afternoon’s BNB price action saw the coin trade as low as $284, with these levels being the lowest for Binance Coin since January 18, 2023. The coin is currently trading around $286 according to data from CoinGecko.

Today’s losses pushed the price down -13% on the 7-day chart.