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    JUST IN: Binance’s BNB under SEC’s radar for alleged ICO violations

    The United States Securities and Exchange Commission [SEC] is investigating whether Binance Holdings Ltd. broke its laws by selling digital tokens when it launched its native BNB token via an ICO five years back.

    Facets of the investigation

    During the peak of the ICO boom in 2017, BNB’s ICO had taken place, and soon after that, Binance was opened. The investigation, as such, is focussed on the firm’s origins and those of its BNB token. Per a recent Bloomberg report,

    Investigators are examining if the 2017 initial coin offering amounted to the sale of a security that should have been registered with the agency.

    The regulatory agency is also peeking into another tangent involving CZ. Highlighting the same, the Bloomberg report noted,

    Another person with direct knowledge of the review said the SEC is also looking at market-making companies tied to Zhao, who is widely known as CZ. The SEC has expressed interest in Zhao’s ownership stakes of market makers on Binance.US and whether the exchange has conducted broker-dealer activities, the person said. 

    As such, Binance.com and Binance.US are separate entities. The former is exclusively for non-US users, while the latter is US centric and offers products and services that are compliant with US federal and state regulations, the exchange said in its defense.

    Binance, however, declined to comment on the the latest development, but assured that it would continue to meet regulatory standards.

    “It would not be appropriate for us to comment on our ongoing conversations with regulators, which include education, assistance, and voluntary responses to information requests.”

    It added,

    “…we will continue to meet all requirements set by regulators.” 

    Binance’s BNB is not the first token that has fallen under the SEC’s radar. Last year, it was brought to light that the apex DeFi token, Uniswap, was being investigated as well. Alongside, Ripple and its execs are already fighting a legal battle with the regulatory agency.

    At this stage, it is not yet clear if the SEC would end up taking legal action against the exchange, for merely the investigation is on. BNB—the fifth largest crypto—begun trading in red right after the said news broke. At press time, it was down by 6% to $287 on the daily timeframe.

    Dream Hub Africa
    Dream Hub Africa
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