The crypto exchange platform Binance is in hot water with the U.S. SEC as it investigates the firm’s origin and those of its BNB token.
Regulators are investigating if the 2017 Initial Coin Offering of the BNB token amounted to the sale of a security, for if it was a security it should have been registered with the SEC.
Regarding these investigations, Binance said, “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.”
The BNB token is currently valued around $300 and has a market capitalization of about $48.5 billion. It is integral to the Binance ecosystem.
If the SEC concludes that BNB is a security, Binance would be caught in a long term court battle with the SEC, just like the ‘Ripple vs SEC’ Saga for its token XRP.
This investigation, however, is months away from any conclusion. SEC is also looking into possible trading abuses by Binance insiders and whether Binance.US is appropriately separated from its global counterpart.
Moreover, the SEC is looking into the market-making companies tied to Zhao (the CEO of Binance), and Zhao’s ownership stakes of market makers on Binance.US to figure out whether the exchange has conducted broker-dealer activities.
The BNB Chain, however, is continuously expanding and building. Recently, Binance announced an investment in PancakeSwap, a decentralized exchange (DEX) built on the BNB Chain.
