Binance’s BNB Token Is Reportedly Facing Probe by the US SEC

Binance is facing an investigation by the Securities and Exchange Commission (SEC) for possible violations of the United Securities markets law with the sale of Binance coins, according to a Bloomberg report.

Binance sold BNB tokens in 2017, which is now a crucial part of the exchange's ecosystem. The exchange sold 100 million BNB tokens, half of its total supply, in its initial coin offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term. The ICO whitepaper further mentioned that 85 percent of the raised funds would be used to build and market Binance’s global exchange platform.

Binance’s founding team, including the CEO Changpeng Zhao, held another 80 million of the reserved BNB tokens. The value of the token has skyrocketed over the years.

The US securities market regulator is primarily investigating whether BNB tokens can be categorized under securities, and if Binance violated the laws with the sale of unregistered securities.

Neither the SEC nor Binance has confirmed the reports of the investigation.

However, in a press statement, a Binance spokesperson said: “As the industry has grown at a rapid pace, we have been working 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.”

However, a regulatory investigation does not guarantee an enforcement action or a lawsuit against the exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term.

Several Agencies Are after the Exchange

The possible investigation of the SEC is not the first one the crypto exchange giant will be facing. Binance is already facing investigations in the United States by the Justice Department, the Commodity Futures Trading Commission (CFTC) and the Internal Revenue Service.

Moreover, the US securities market regulator is investigating the ties of its US affiliate with two market-making entities, which are fully or partially owned by CE Zhao. Furthermore, Binance US is reportedly facing the probe of whether its employees are indulging in insider trading.

Meanwhile, the SEC is already fighting a legal battle with the blockchain company, Ripple for allegedly violating US securities laws with the sale of XRP tokens.