Bloomberg reports Securities and Exchange Commission (SEC) investigation against Binance BNB coin. What’s going on?
After a slight recovery, crypto market prices are going down again.
On June 7 BTC lost 7% of its week-to-week value. Ethereum is down to $1740, ADA trades at 58 cents, and XPR at 38 cents.
One of the biggest losers from top-10 coins is Binance’s BNB token. BNB price decreased almost 15% this week and it continues to drop.
Some say that the US regulator could hit the BNB value. According to the new Bloomberg report, there is a federal investigation against Binance’s coin.
Here is what’s going on.
What’s going on with Binance BNB coin and SEC rules violations
Bloomberg reports that Binance faces possible violations of the United Securities markets law because of its BNB token sales.
Since 2017 Binance exchange sold around 100 million BNB tokens. It’s half of the total BNB supply, and now BNB is an essential part of the Binance ecosystem.
According to the BNB whitepaper, 85% of the funds would go to Binance global exchange platform development.
80 million of the reserved BNB tokens are held by the Binance founding team, including the CEO Changpeng Zhao. The last is one of the reachest crypto billionaires in the world.
But Securities and Exchange Commission allegedly investigates whether BNB tokens can be categorized under securities. The main pretense is that Binance could violate the laws by selling unregistered securities.
Neither the SEC nor Binance has confirmed the reports of the investigation.
In the recent release, Binance’s spokesperson underlined that the company works ‘very diligently to educate and assist law enforcement and regulators in the U.S. and internationally, while also adhering to new guidelines.
“We will continue to meet all requirements set by regulators,” the release says.
Still, a regulatory investigation does not mean any penalties, enforcement actions, or a lawsuit against the world’s biggest exchange.
Earlier Binance experienced investigations in the United States by the Justice Department, the Commodity Futures Trading Commission (CFTC), and the Internal Revenue Service.
The US securities market regulator also investigates the ties of its US affiliate with two market-making entities, which Zhao fully or partially owns. Moreover, Binance could face a federal inquiry about some of its employees and their possible involvement in insider trading.
While Binance could face one of its first serious investigations by the SEC, the US government is not new to some crypto company inspections.
Remember the long Ripple legal battle? The company is accused of the same alleged violations of US securities.
And still the story has no end.
There also were some US regulator concerns because of Cardano (ADA) trading. eToro exchange even delisted ADA because of it.
So generally it seems like the US government doesn’t know how to properly regulate crypto companies. And that’s obvious because there are now any fundamental crypto regulations in the US.
Let’s just wait for the next victim of the selective SEC investigations.
Sources: Bloomberg, Forbes