Bitcoin tumbled as regulators ordered Paxos to stop minting the Binance stablecoin, according to a report from CNBC Crypto World.
The price of Bitcoin dropped more than 5% on Tuesday after the New York State Department of Financial Services (NYDFS) ordered Paxos, the issuer of the Binance stablecoin, to stop minting the token.
The NYDFS said that Paxos had not obtained the proper authorization to issue the stablecoin, and ordered the company to cease and desist from any further activities related to the token.
The news of the NYDFS order sent shockwaves through the crypto markets, with Bitcoin prices tumbling from around $11,600 to around $10,900 in the hours following the announcement.
The Binance stablecoin is a dollar-backed cryptocurrency that was launched in 2019 in partnership with Paxos. The token was designed to be used by traders on the Binance exchange, and has become increasingly popular in recent months.
The NYDFS order has raised questions about the legality of the token, and whether it is compliant with existing regulations.
The news is likely to have a negative impact on the price of Bitcoin in the short-term, as investors take a wait-and-see approach to the situation.
It remains to be seen how the situation will play out in the long-term, but it is clear that the NYDFS order has cast a shadow over the crypto markets.