BUSD on binance chain has a history of being undercollaterized and allegedly used to pump BNB prices.

I know CZ and people from the binance team lurk on r/CryptoCurrency from time to time, so I would like them to reply with their side on here or an explanation atleast. I am not trying to fud, I just want some answers.

I will start off by explaining how BUSD on binance chain works. BUSD is issued by Paxos on the ethereum chain, this BUSD is regulated by the New York State Department for Financial Services. BUSD on other chains however are not. Binance bridged BUSD over to binance chain via locking BUSD on the ethereum chain and minting new ones on BSC. That BUSD is issued directly by binance and not Paxos.

Here is the address in which erc20 BUSD are locked in: https://etherscan.io/address/0x47ac0Fb4F2D84898e4D9E7b4DaB3C24507a6D503

According to data upto the year 2021

DataFinnovation has discovered that the Binance-Peg BUSD wallet on Ethereum has regularly had a lower balance than the amount of BUSD circulating on the Binance Smart Chain, meaning that somehow, someone, was creating BUSD out of thin air to use on Binance Smart Chain.

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Source: DataFinnovation

As you can see based on the chart above, almost everytime BUSD on BSC is undercollaterized, the price of BNB pumps hard. This is pure speculation, but I truly cannot believe it is a coincidence every single time.

Sources:

https://medium.datadriveninvestor.com/binance-built-a-blockchain-except-it-didnt-5759224ba7aa

https://datafinnovation.medium.com/binance-peg-busd-was-often-undercollateralized-2bb7f8903ee1