According to Bloomberg, the United States Securities and Exchange Commission (SEC) has launched an investigation against the crypto exchange Binance’s native token Binance Coin (BNB). According to the report, the Commission is investigating Binance Holdings Ltd., for possible violations of US securities laws.
SEC investigating Binance’s BNB, BNB price has slipped 5% on the news
Binance was launched in 2017 and in July of that year, it deployed its native token through an Initial Coin Offering (ICO). Binance Coin (BNB) is distributed among the original backers and angel investors and the core team of the exchange.
The token was sold for 15 cents in the public sale, and it helped Binance raise around $15 million in funds. This money is used for platform improvement, growth, marketing, education, and more.
Citing people familiar with the matter, Bloomberg claims the Commission is investigating whether Binance should register BNB as security and whether the ICO constitutes an illegal sale of unregistered securities. The token is currently the most popular in the world and has moved from third to fifth in terms of market capitalization.
BNB/USD 4-hour chart | Source: TradingView
At press time, Binance Coin (BNB) is trading at $287 and recording losses of 5% and 10% respectively over the past 24 hours and the past 7 days. The token records over $46 billion in market capitalization, the number three token excluding the stablecoins Tether (USDT) and USD Coin (USDC), and appears to be reacting negatively to the news.
Additional information claims the Commission may also be looking to Binance.US, a subsidiary of Binance, to determine if the company has spun off its parent company’s business. Binance has yet to issue an official statement regarding the investigation.
Cryptocurrency exchange platforms appear to be facing a day of negative news. Earlier today, Binance enabled up to $2.3 billion in money laundering through its platform. Binance denies these allegations and emphasizes its role in assisting law enforcement agencies to prevent criminals from taking advantage of its platform for illegal activities.
The US SEC has launched legal actions against crypto-based companies for allegedly selling unregistered securities. Most famously, the Commission is currently in a legal battle against payments company Ripple and two of its executives for this very reason.
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