Binance announced its decision to force-convert Circle-launched USDC, as well as USDP, and TUSD balances to BUSD. The auto-conversion will come into effect on September, 29.
"In order to enhance liquidity and capital-efficiency for users, Binance is introducing BUSD Auto-Conversion for users' existing balances and new deposits of USDC, USDP and TUSD stablecoins at a 1:1 ratio... After the Auto-Conversion is completed, users will be able to withdraw USDC, USDP or TUSD at a ratio of 1:1 from their BUSD balances," Binance blog post reads.
CEO Binance CHangpeng Zhao prefered not to use the term "delisting", paying attention of his followers in twitter that users could still deposit and withdraw USDC.
Although officially the delisting is aimed at increasing the liquidity, crypto traders did not fail to recall the recent negative news regarding the possible problems of the exchange with the US financial authorities and regulators. U.S. federal prosecutors asked Binance, the world's largest cryptocurrency exchange, to provide extensive internal records about its anti-money laundering checks, along with communications involving its chief executive and founder Changpeng Zhao, Reuters reported last week. Earlier, Reuters claimed that Binance continued to process trades by clients in Iran despite US sanctions and a company ban on doing business there.
Some crypto holders supposed that the decision was fueled by the recent crackdown on Tornado Cash and and subsequent freezing of dozens of addresses associated with the mixer.
USD Coin is a USD-pegged stablecoin launched by a consortium called Centre founded by Circle, Coinbase and Bitmain. It is the second largest stablecoin on the cryptocurrency market by the market cap ($52 billion), following USDT ($67 billion).
BUSD is a Binance-launched USD-pegged stablecoin with the market capitalization at $19.5 billion, making it the third largest stablecoin.
According to Coingecko, after Tornado Cash sanctions, crypto investors rushed to convert their USDC into USDT. USDT’s supply rose by 2.6% in 30 days to $67 billion, while USDC declined 2.1% to $53 billion. Around $1 billion of the USDT market cap increase coincided with the last seven days after USDC issuer Circle began blocking wallets linked to Tornado Cash.