The initial coin offering that served as the cornerstone of the launch of the Binance cryptocurrency exchange in 2017 is getting a facelift from federal regulators.
According to unnamed sources a. quoted in bloomberg As reported today by Tom Schoenberg and his associates, the Securities and Exchange Commission (SEC) is reviewing the exchange’s origination of Binance Coin (BNB) for potential violations of securities regulations. Since its launch in 2017, Binance has become the largest cryptocurrency exchange on the market by trading volume.
That’s how news of a federal regulatory inquiry comes Reuters released the results of an unrelated investigation in which the news service claims to have laundered at least $2.35 billion in illicit money Binance between 2017 and 2021.
It is unclear what prompted this latest look by the SEC, but BNB is currently the fifth-largest cryptocurrency, according to Coinmarketcap, with a total market cap of $48 billion and a net market cap of $1.4 billion as of this writing. 24 hour trading volume is recorded.
At the heart of the matter is the SEC’s regulatory authority on investment contracts, and whether digital currencies qualify as-Especially if they are sold to investors as a way to fund the company with the promise of making profits from the company’s efforts.
BNB was created in July 2017 as an ERC-20 token Ethereum blockchain Before moving to a different currency chain. The initial coin offering of 100 million tokens at 15 cents per token raised $15 million. Now the native currency, BNB, can be traded directly on the Binance crypto exchange, used to make purchases and payments, and pay a discounted rate on Binance transaction fees.
bloomberg It claims that Binance is “facing multiple investigations in Washington,” which in turn are part of dozens of enforcement actions. ICO,
In a statement to the financial news outlet, Binance said, “It would not be appropriate for us to comment on our ongoing conversations with regulators, including voluntary responses to education, support and information requests,” adding, “We will continue to “Meet all the requirements set by the regulators.”
Those regulators could also look at an affiliate firm Binance US founded in 2019, and whether it is sufficiently different from its global parent.
bloomberg Company officials clarified that “Binance.US is a separate US-focused trading platform that serves US users by offering products and services compliant with US federal and state regulations,” and Binance US’s A separate statement confirms its commitment to compliance. ,
In March, Binance faced a $5 million class-action lawsuit in which users claimed that the exchange sold them 79 different crypto assets (including dogecoin, solanaAnd Cardano) which should have been handled as licensed securities.
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