The Securities and Exchange Commission (SEC) in the United States is apparently looking into Binance’s BNB coin, which may be an unregistered security. If the cryptocurrency is determined to be a security, Binance might find itself in a similar situation as Ripple Labs, which is now battling the SEC over the sale of the XRP coin.
Binance’s BNB crypto is being investigated by the SEC
Bloomberg reported Monday that the US Securities and Exchange Commission is investigating whether Binance Holdings Ltd. broke securities laws when it staged an initial coin offering (ICO) of the BNB token five years ago, citing people familiar with the situation.
If the SEC determines that the BNB sale in 2017 constituted an unregistered securities offering, Binance might face the same fate as Ripple Labs, which has been fighting the SEC since December 2020 over the sale of the XRP currency. The Securities and Exchange Commission alleges that XRP is a security.
However, one of the persons noted that an SEC enforcement investigation into BNB is likely months away from coming to a conclusion.
“It would not be acceptable for us to comment on our continuing talks with authorities, which include education, assistance, and voluntary replies to information demands,” Binance said to the news site. The corporation, however, stated that it will “continue to satisfy all regulatory standards.”
Binance is known in the United States as Binance.us. Binance.com and Binance.US are “different organizations,” according to the global crypto exchange.
Binance.us made an independent statement highlighting its commitment to “upholding the highest levels of compliance.”
According to the magazine, the crypto exchange is under investigation in Washington. In addition to looking into alleged insider trading by Binance employees, the securities regulator is looking into market-making firms linked to Binance CEO Changpeng Zhao (CZ).
By market capitalization, BNB is the fifth-largest cryptocurrency. It costs $294.35 at the time of writing. When word of the SEC probe came on Monday, the coin dropped 11% but has since recovered some of its losses.
