key takeaways
- Binance is facing scrutiny from the SEC over whether the firm’s initial coin offering is equivalent to the sale of a security.
- BNB is down 8.5% since yesterday’s SEC investigation news broke.
- Although the SEC’s investigation has been thoroughly corroborated, BNB’s relative stability may indicate that the crypto market is not particularly concerned.
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BNB is down 8.5% since the news first surfaced.
Binance hit by SEC investigation
The Securities and Exchange Commission is investigating Binance over its BNB initial coin offering.
every monday bloomberg As per the report, Binance Holdings Ltd. is facing scrutiny from the SEC as to whether the firm’s initial coin issuance amounts to the sale of a security. According to people familiar with the matter, the purpose of the SEC’s investigation is to find out whether BNB should have been registered with the agency before it was offered for purchase to US citizens in 2017.
Since the news late last night, Binance’s BNB has traded alongside the broader crypto market. The flagship coin of the exchange has lost around 8.5% of the market cap and is currently trading at around $275.
In a statement commenting on the news, Binance neither confirmed nor denied that it was under scrutiny from the SEC, stating that “it would not be appropriate for us to comment on our ongoing conversations with regulators, Including education, support, and voluntary responses to information requests.”
The alleged SEC investigation would not be the first time Binance has come under scrutiny from US regulators. In March 2021, the Commodity Futures Trading Commission launched an investigation into Binance to determine whether the exchange had illegally facilitated trading for US residents. Two months later, the exchange faced further investigation from the Internal Revenue Service and the Department of Justice in cases of money laundering and tax evasion.
Just yesterday, Binance was embroiled in another controversy when a Reuters investigation accused the exchange of turning a blind eye to money laundering of more than $2.35 billion between 2017 and 2021. Binance representatives have since responded to claims of money laundering. slanting” and saying that they “disregard facts to achieve an agenda.”
Although the SEC’s investigation of Binance’s initial coin offering has all but been confirmed, the relative stability of BNB may indicate that the crypto market is not particularly concerned. This is likely due to the SEC’s ongoing case against Ripple, which claims that the XRP coin is a security rather than a commodity. Although the Ripple case is not yet over, the current consensus is that the SEC could lose, and XRP would not be considered a security. If this scenario does indeed hold, it would set a powerful precedent that similar crypto coins should also be viewed as commodities rather than securities.
Disclosure: At the time of writing this article, the author owned ETH and several other cryptocurrencies.
