SEC Probes Binance — BNB Could Be Unregistered Security: Report

June 8, 2022 0 Comments

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SEC Probes Binance — BNB Could Be Unregistered Security: Report

The U.S. Securities and Exchange Commission (SEC) is reportedly investigating Binance’s BNB token, which could be an unregistered security. If the cryptocurrency is found to be a security, it could put Binance in a similar position to Ripple Labs which has been in an ongoing lawsuit with the SEC over the sale of the XRP token.

SEC Investigates Binance’s BNB Crypto

The U.S. SEC is investigating whether Binance Holdings Ltd. breached securities laws when it conducted an initial coin offering (ICO) of the BNB token five years ago, Bloomberg reported Monday, citing people familiar with the matter.

If the security watchdog finds that the BNB sale in 2017 was an unregistered security offering, Binance could be put in a similar position as Ripple Labs which has been in an ongoing lawsuit with the SEC over the sale of the XRP token since December 2020. The SEC claims that XRP is a security.

However, an SEC enforcement probe involving BNB is likely months away from any conclusion, one of the people said.

Binance told the news outlet: “it would not be appropriate for us to comment on our ongoing conversations with regulators, which include education, assistance, and voluntary responses to information requests.” However, the company stressed that it will “continue to meet all requirements set by regulators.”

In the U.S., Binance operates under Binance.us. The global crypto exchange clarified that Binance.com and Binance.US “are separate entities.”

Binance.us independently issued a statement, emphasizing that it was “committed to upholding the highest standards of compliance.”

The crypto exchange is facing multiple investigations in Washington, the publication conveyed. Besides investigating possible trading abuses by Binance insiders, the securities regulator is also probing market-making companies tied to Binance CEO Changpeng Zhao (CZ).

BNB is 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 the news of the SEC investigation broke but has since regained some of its losses.

What do you think about the SEC probing Binance and BNB? Let us know in the comments section below.

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