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This Week In DeFi – February 17

This Week In DeFi – February 17

This week, Paxos halts BUSD issuance, Nexo cuts off US users, Abu Dhabi pledges $2B to Web3 and the Blur NFT marketplace drops a token.

February 17, 2023

To the DeFi community,

This week, Binance USD (BUSD) issuer Paxos has been ordered by the New York Department of Financial Services (NYDFS) to stop issuing the stablecoin, following an investigation.

Not only that, but the US Securities and Exchange Commission (SEC) is also planning to sue Paxos over BUSD for allegedly violating securities laws. Paxos has announced that it will cease the issuance of new BUSD stablecoins as of February 21, and will honor redemptions through at least February 2024.

Almost $700 million BUSD has already been burned in exchange for US dollar redemptions since the news broke.

This week the NYDFS ordered US-based Paxos to stop issuing US dollar-denominated stablecoin BUSD and the SEC issued a Wells notice to Paxos. We don’t know what aspects of BUSD might be of interest to the SEC.
What we do know: stablecoins are not securities 🧵
— Coinbase 🛡️ (@coinbase)
1:38 AM • Feb 15, 2023

Crypto lending platform Nexo will stop its Earn Interest Product for all US clients on April 1, following a settlement with the Securities and Exchange Commission (SEC) last month.

Nexo was charged by the SEC for failing to register the retail crypto asset lending product in the US. Without admitting or denying the charges, Nexo agreed to pay $45 million and an order to block it from violating registration provisions under the Securities Act of 1933.

International clients who believe their accounts have been wrongfully flagged must provide updated verification details.

Abu Dhabi's tech ecosystem, Hub71, has launched a $2 billion initiative to support Web3 and blockchain technology startups in the region.

The Hub71+ Digital Assets ecosystem will offer startups access to various programs and potential partners, promote startup growth in the Middle East and global markets, and support businesses relocating to Abu Dhabi.

The initiative will be based at Hub71 in the Abu Dhabi Global Market financial district and is supported by the First Abu Dhabi Bank's research and development hub, FABRIC.

Abu Dhabi's @hub71ad has launched Hub71+ Digital Assets, an ecosystem focused on Web3 and blockchain startups, with over $2B committed funding from First Abu Dhabi Bank.
#startups#uae#funding@FABConnects
— Wamda ومضة (@WamdaME)
1:45 PM • Feb 15, 2023

Blur, a new NFT marketplace, has finally launched its native token after recently delaying its unlocking for two weeks.

The marketplace has already raised enough money to achieve “unicorn” status, with a valuation north of $1 billion. The total supply of Blur's native BLUR token is capped at three billion tokens, with 12% (360 million tokens) distributed during Tuesday's unlock.

Blur overtook the established market leader, OpenSea, in NFT trading volume on Wednesday, according to data analytics platform Nansen.ai.

The US regulator crackdown continues, as stablecoin issuer Paxos is forced to wind down BUSD – currently the third-largest stablecoin on the market.

The news comes right as the Financial Stability Board (FSB) released a report on DeFi, discussing whether to subject stablecoins and centralized crypto platforms to greater regulation – a move that may further hamper the onboarding of users into the space.

Coupled with Nexo’s recent settlement, it appears that centralized crypto platforms will continue to be impacted by US regulatory bodies for the foreseeable future.

On the plus side, international investment into the Web3 and DeFi space continues to flourish as Abu Dhabi pledges $2 billion in investments, while Japanese financial giant Nomura also ventures into the industry via investment into Infinity Exchange.

Development also continues to be exciting, especially in the scaling space as Polygon and zkSync battle for zero-knowledge territory – watch this space!