Dogecoin Foundation Member: “Get Your Doge Off Of Binance”

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Dogecoin Foundation chair member, Mischa ‘Cannoli’ Boar, has taken to Twitter to share thoughts about the recent Binance USD (BUSD) contention. In a long thread, Boar, who is obviously worried, explained that despite Binance CEO Changpeng Zhao downplaying the role of BUSD in the Binance Ecosystem, in reality, it is the official stablecoin of the leading centralized finance (CeFi) cryptocurrency platform.

And of course, BUSD is used EVERYWHERE on Binance's platforms.

It is used for all their trading pairs and derivatives, its use incentivized with fee discounts; it is part of the "Binance Earn" program, with 6% APY.

De facto, #BUSD is the "official" stablecoin on Binance.

10/n

— Mishaboar (@mishaboar) February 13, 2023

According to the foundation member, the process of turning Binance-pegged BUSD into BUSD is entirely frictionless, adding, “I would say that when it comes to Binance’s platforms, it is close to impossible, if not meaningless, to try to differentiate the two assets.”

Mischa Boar used the thread to highlight some facts and promised that he would have more to say concerning the controversy once the Securities and Exchange Commission (SEC) issues its official press releases to the public. Before then, however, Mischa Boar broke down the situation in a Tweet, saying, “Binance-pegged BUSD is a tokenized version of BUSD, a ‘bAsset’ like Binance-pegged Doge or Binance-pegged BTC.

Binance-pegged #BUSD is a tokenized version of BUSD, a "bAsset" like Binance-pegged Doge or Binance-pegged BTC.

Binance, in their own Binance Academy page. admits to fully own and control this tokenized version of BUSD. https://t.co/0rimOqnsKj

5/n pic.twitter.com/ofpofjIP63

— Mishaboar (@mishaboar) February 13, 2023

Binance Actions That Triggered The SEC: Mischa Boar

This means “Binance issued Binance-pegged BUSD without taking care to provide verifiable collateral, potentially inflating the supply of BUSD in circulation within their platforms – often operating as a black box to observers on the outside – arbitrarily.”

As part of their folly, according to the Dogecoin Foundation member, they did not do this with a token pegged to a decentralized cryptocurrency but with BUSD, an asset issued by a regulated NYDFS entity, carrying Binance’s branding and directly connected to reserves in USD and Treasury Bonds.

In the thread, Mischa Boar says that while BUSD is issued by NYDFS-regulated Paxos and not by Binance, Binance has consistently advertised BUSD as a “partnership” with Paxos. But more importantly, several actions by Binance over the past years and months might have triggered the reaction by the SEC.

To begin with, Binance has been pushing BUSD on its platform aggressively right from when it was first launched. In particular, in 2022, they pushed several stablecoins out of their exchange and auto-converted users’ funds to BUSD. According to the Dogecoin Foundation member, Paxos was quite happy about the move, even though their other stablecoin, USDP, was among the stablecoins removed from the exchange.

Secondly, In January 2023, Binance admitted a “lapse” in maintaining BUSD reserves to back their “Binance-pegged BUSD,” the tokenized version of BUSD on their BNB/BSC networks. The “lapse” amounted to at least $1 billion, according to analysts.

Not Your Keys, Not Your DOGE

The above expressions by the Dogecoin Foundation member draw inspiration from the recent news that cast a dark cloud on Paxos issued Binance USD (BUSD), as SEC chair Gary Gensler launched an investigation into the popular stablecoin.

On Monday, the New York State Department of Financial Services (NYDFS) legally ordered the suspension of BUSD minting, a move likely to progressively reduce the enormous market cap of the BUSD stablecoin. According to Binance CEO, however, all current Binance USD (BUSD) assets are backed one-to-one, with Paxos agreeing on that at least until next year.

Delving deeper into the Twitter thread, Mischa Boar urged his followers to avoid investing in stablecoins long-term on the grounds that a long-term investment in stablecoins could bring additional layers of risk, including the liquidation of the issuing company and regulation changes.

In closing, Mischa Boar’s intense monologue ends with a catchphrase, “not your keys- not your DOGE,” with the Dogecoin Foundation member urging his followers to withdraw their funds held in CeFi. The argument draws inspiration from the plunge of the crypto exchange FTX, which broke the trust of investors in centralized exchanges. Since the FTX implosion, centralized cryptocurrency platforms have been under the keen watch of analysts, with a minor glitch having enough magnitude to send investors out in masses.

Circle Persuades SEC To Investigate Binance

In other news, it appears Binance’s main competitor, Circle, heavily persuaded the SEC to probe Binance’s stablecoin. Circle has been issuing USDC (USD Coins) for the past ten years. USDC has a market cap that is $60 billion lesser than that of BUSD.