Paxos Trust Company has been ordered by the New York Department of Financial Services (NYDFS) to stop issuing the U.S. dollar-pegged Binance USD (BUSD) stablecoin, The Wall Street Journal reported on Monday. The New York-based finance firm will continue to manage BUSD redemptions. See related article: Binance makes Korea comeback with GOPAX acquisitionFast facts“We were informed by Paxos they have been directed to cease minting new BUSD by the New York Department of Financial Services… As a result, BUSD market cap will only decrease over time.” tweeted Binance Chief Executive Officer Changpeng Zhao on Monday.BUSD was co-developed by Paxos and Binance, the world’s largest cryptocurrency exchange. The Ethereum-based stablecoin is issued and managed by Paxos. BUSD is the third-largest stablecoin by market capitalization with over US$16.1 billion in circulation, according to CoinMarketCap data. Paxos claims its stablecoin is backed one-to-one by fiat.The development comes days after reports unveiled last week that the NYDFS has been investigating Paxos.The U.S. Securities and Exchange Commission may also reportedly pursue legal action against Paxos for allegedly issuing BUSD as an unregistered security.Paxos is also the issuer of its U.S. dollar-pegged stablecoin, Pax Dollar, the sixth largest stablecoin by market capitalization, and its gold-backed stablecoin, Pax Gold.See related article: Binance suspends international U.S. dollar transfers, CEO indicates issues with banks