SEC Launches Investigation into Binance

SEC Launches Investigation into Binance

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SEC’s probe into Binance

It is a bleak time for crypto exchange Binance as the U.S. Securities Exchange Commission has launched an investigation against it

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The U.S. financial watchdog suspects Binance sold unlicensed securities in its BNB Initial Coin Offering (ICO). Binance launched the BNB token in 2017. The token has grown to be the fifth-largest globally. Binance’s BNB is currently trading at $293 after dropping by 4.66% following the news.

Binance Under Probe Because of Its 2017 ICO

The SEC’s probe into Binance is based on whether the exchange should have registered BNB as a security token at the time of the launch. An ICO is usually the first time a company allows investors to trade its shares publicly. SEC is probing Binance’s origin and whether the ICO amounted to Binance’s BNB as a security token.

Commenting on the news, crypto exchange Binance maintained cooperating with regulatory authorities and educating them on the industry. Binance will continue doing so as the industry continues growing at a rapid pace.

The exchange also stated that it is not appropriate to comment on its ongoing conversations with regulators. The confidential discussions cover education, assistance, and voluntary responses to information requests.

Reportedly, Binance CEO Changpeng Zhao is also under SEC’s radar. According to sources, the ownership stakes of Zhao to market-making companies have attracted the regulator’s attention.

SEC has not commented on the reports yet. However, sources reveal that its probe has yet to reach any conclusions.

U.S. SEC Going After ICOs

SEC’s probe into Binance is the latest of lawsuits the exchange has been launching against ICOs lately. The financial watchdog has launched several lawsuits against the offerings that involve issuing virtual coins to raise money. In December 2020, it sued Ripple for the sale of XRP illegally.

In September 2021, SEC went after DeFi kingpin Uniswap Binance and raised $15 million from its ICO.

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