Digital assets took a beating to start the week, with major tokens falling after U.S. regulators’ latest crackdown on crypto.
The New York Department of Financial Services has ordered Paxos, a company based in the state, to cease issuing the BUSD stablecoin it developed in partnership with Binance, the world’s leading crypto exchange by trading volume. The news was first reported by the Wall Street Journal early Monday.
BNB, the native token of the Ethereum-compatible blockchain built by Binance, plummeted 10% Monday, according to data from The Defiant Terminal. Solana and Polygon each lost about 8%, and Ether fell about 3%. Bitcoin was relatively unscathed, dropping just 1%.
The selloff marked a rare divergence between crypto and equities markets, which have tended to move in lockstep. Just before the close of trading Monday, the Nasdaq and S&P 500 were up about 1%.
Some of Monday’s biggest losers were tokens that had enjoyed a red-hot start to the new year.
Layer 2 network Optimism’s OP, which hit an all-time high earlier this month, dropped more than 13%.
Rocket Pool, Lido and Frax, each of which is up at least 90% since Jan. 1, shed more than 10% of their value on Monday.
Only a handful of tokens posted gains to start the week, including DeFi heavyweights MKR and CRV, up 9%; AAVE, up 2%; and LQTY, which surged 45%.
MKR and LQTY are the governance tokens of Maker and Liquity, both of which build decentralized stablecoins thought to have less exposure to regulatory headwinds.