After Binance’s BUSD stablecoin fell to a low of $0.20 versus the DAI stablecoin on Wednesday morning, trading volume on the cryptocurrency exchange completely dried up.
The rapid fall was brought on just a single sell order for $647,000. But as soon as arbitrage traders bought the discount and sold it for $1 on other exchanges, BUT immediately recovered its peg versus DAI.
According to CoinDesk, $3.38 million in combined sell orders were found in Binance’s orderbook while BUSD was linked to the DAI.
Paxos said last week that it will stop issuing new BUSD tokens in response to the New York Department of Financial Services’ requests (NYFDS). The NYFDS is also looking at Paxos itself.
Limit orders cannot be placed by normal users outside of severely constrained price bands (close to price)
Therefore only the determined marketmaker (high odds binacne themselves) can actually profit when these “scam” wicks come through.