Wednesday, October 5, 2022

SEC Launches Probe Into Binance’s BNB As Token Slips 7%

Still reeling from an exposé which saw it accused of aiding money laundering on its platform, Binance’s bad day continues as the U.S. Securities and Exchange Commission (SEC) has also begun looking into its BNB token, per a Bloomberg report

According to the report, the investigation is to establish whether or not, Binance Holdings flouted any securities rules when it launched its BNB token in an initial coin offering (ICO). This was as far back as July 2017. In other words, SEC may be looking to find out, if the BNB token is actually an unregistered security. 

Recall, that the agency has always claimed that most cryptocurrencies are securities. And in line with its beliefs, has brought cases against several ICO projects in the past.

But the Bloomberg report also claims that there is every possibility that the SEC will eventually not take any legal steps against Binance. Especially since the investigation is yet to yield any positives.

BNB Sinks

Meanwhile, in quite the expected manner, the price of the BNB token has dipped by over 7%. This follows after the news reports spread about BNB being under investigation. And as of publication, the coin could be seen trading at $284.72, per CoinMarketCap data.

However, the BNB remains the fifth-largest cryptocurrency by market cap, having seen massive growth in 2021.

SEC Move Anticipated ?

Interestingly, the hierarchy at Binance may have anticipated the ongoing SEC investigations. In fact, that expectation may have been what informed a statement that the company’s founder Changpeng Zhao (CZ) made in a blogpost, back in 2020. At the time, CZ claimed that the wording of the BNB whitepaper had been changed in January 2019. He also went further to explain that the changes had to be made because “the potential for being misunderstood as a security is higher in certain regions.”

For what it’s worth, however, Binance is no stranger to probes such as this. As a matter of fact, the exchange is currently under the investigation of many federal agencies across different regions.

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