The U.S. Securities and Exchange Commission (SEC) is reportedly investigating Binance’sBNBtoken, which may be an unregistered security. If the cryptocurrency is found to be a security, Binance could find itself in a similar position to Ripple Labs, which continues to litigate with the SEC regarding the sale ofXRPtokens. XRP
SEC Investigates Binance’sBNBCrypto
The U.S. SEC is investigating whether Binance Holdings Ltd. violated securities laws when it conducted an initial coin offering (ICO) forBNBtokens five years ago. BNBtokens five years ago, Bloomberg reported Monday, citing people familiar with the matter, as it investigates whether the company violated securities laws.
If the
security watchdog finds that theBNBsale in 2017 was an unregistered securities offering, Binance could be put in the same position as Ripple Labs, which continues to litigate with the SEC over the sale of2020 XRP tokens for sale since December, 2020; the SEC claims thatXRPis a security; XRPis a security; XRP
is an unregistered security; and XRP
is an unregistered security.
But SEC enforcement probes, includingBNBwill take months to conclude, one official said.
Binance told the news outlet that it is “not appropriate to comment on our ongoing conversations with regulators, including education, assistance, and voluntary responses to information requests.” The company stated. However, he stressed that the company “continues to meet all requirements set by the regulators.”
In the United States, Binance operates under Binance.us. The global crypto exchange clarified that Binance.com and Binance.US are “separate entities.”
Binance.us issued its own statement, emphasizing that it is “committed to maintaining the highest standards of compliance.”
The crypto exchange is facing multiple investigations in Washington, the publication said. Besides investigating possible trading abuses by Binance insiders, securities regulators are also investigating market-making firms associated with Binance CEO Changpeng Zhao (CZ).
BNBis currently the fifth largest cryptocurrency by market capitalization. At the time of writing, its price is $294.35. The coin fell 11% on Monday when news of the SEC investigation broke, but has since recouped some of its losses.
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