Nearly $2.5 bn eroded in Binance's stablecoin over regulatory scrutiny. Where is money moving?

livemint.com:

Given the recent development around Binance USD, nearly $2.5 billion of market cap has been eroded in the stablecoin. Changpeng Zhao, the co-founder and CEO of the world's largest cryptocurrency exchange in terms of trading volume, on Friday, said, money has moved from BUSD to Tether. Zhao also reiterated that Binance USD is not issued by Binance.

Changpeng Zhao who is popularly known as CZ, tweeted, "BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT."

As per him, USDT which is Tether, its market cap is up by $2.37 billion to $70.1 billion from the previous $67.8 billion.

Also, Zhao pointed out that USD Coin as well witnessed a decline in market cap by $739 million to $41.5 billion from the earlier $42.3 billion.

He said, "Landscape is shifting" while reiterating, "BUSD is NOT issued by Binance."

BUSD market cap dropped -$2.45B (from 16.1B to 13.7B as of now), and most of it has moved to USDT. USDT marketcap + 2.37B (From 67.8B to 70.1B)USDC also declined -739M (from 42.3B to 41.5B)Landscape is shifting.(Note: BUSD is NOT issued by Binance.) pic.twitter.com/kVrZUYjuOh

Why money is moving out of Binance USD stablecoin?

The reason behind the drop in market cap of Binance's stablecoin would be regulatory scrutiny. 

Earlier this week, on Monday, the New York Department of Financial Services ordered Paxos Trust Company, which is the producer of Binance USD, to cease minting BUSD tokens over several unresolved issues related to Paxos’ oversight of its relationship with Binance.

DFS said that it is monitoring Paxos closely to verify that the company can facilitate redemptions in an orderly fashion subject to enhanced, risk-based, compliance protocols.

According to DFS, the