2018-9-24 17:29 |
One of the largest cryptocurrency exchanges in the world, Binance, is home to a huge list of coins trying to make a mark in the cryptocurrency world. However, a recent listing by the exchange has sparked both controversy and concern from some experts. The exchange recently opened deposits for the Paxos stablecoin on its exchange, which will debut with two currency pairs — Bitcoin and Binance Coin.
Paxos has recently gathered flak from the crypto community because of a token freeze controversy, which makes Binance’s timing for listing the token appear very unfortunate.
Announcement Comes With Quick RepercussionsIn its website post, Binance noted that the token would be available with two pairings — PAX/BNB and PAX/BTC, which will be announced soon. The exchange also wrote that PAX is paired one-to-one with USD, which means every PAX token will be valued at $1 forever. It added:
“Please be cautious if/when the price deviates from this ratio.”
The exchange will work with a top-ranking audit firm to release monthly balance attestations for “PAX and USD balanced held/issued.”
Binance also announced its listing of Paxos Standard Token (PAX) on Twitter. As soon as it did, the cryptoverse was flooded with opinions about the move. The exchange’s Twitter account quickly started receiving messages from other users who reacted negatively to the event.
Soon after, Binance CEO Changpeng Zhao wrote on Twitter:
“Regulated, stable coins serve as a middle ground where regulators maintain control, but the token also offers far more freedom than traditional fiat for users. Hope more will copy/follow/improve, and for other fiat currencies too.”
A heated debate then started in the comments section, with people suggesting about listing a decentralized stablecoin instead of a Tether clone.
What Makes Paxos So Controversial?Paxos is a regulated stablecoin approved by the authorities in the state of New York. The company behind the stablecoin Paxos is also licensed with the US Securities and Exchange Commission and handled fiat to back up its coin. The coin is also compliant with standard banking regulations like antimoney laundering laws, identity disclosure and antiterrorism financing regulations.
Problems in the Paxos system were found by researcher John Backus, whose tweetstorms gave crypto users new insight into the coin. He wrote on Twitter:
“Wow, wtf? The PAX stablecoin gives **admin write access** to law enforcement. Basically, the government can FREEZE and BURN anyone’s coins!”
He went on to explain that the government gets direct control of people’s stablecoins, and it can make them ineffective at any time it feels comfortable. Following a regular legal process, the authorities can ask Paxos to freeze coins, and the organization can judge and fulfill the request, giving immense power to the government in the ecosystem.
Cryptocurrencies that started with the idea of removing government control from people’s money, a contract that lets the authorities get so much power, defy the reason for their existence.
Binance Adds Controversial Stablecoin Paxos (PAX) Amid Widespread Concerns About Coin Freeze was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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