US to Investigate Binance over alleged ICO Violations
The Securities and Exchange Commission (SEC) of the United States is presently investigating Binance. The company’s native token, BNB, has been accused of being a security token and of selling it in violation of the law. The SEC is also looking at a variety of aspects, including the exchange platform’s functioning.
Binance is the largest cryptocurrency trading platform in the world, with BNB ranking fifth. According to CMC, the current price is $281.91, with a market value of around 46 billion dollars. The token’s price has dropped as a result of the SEC’s surveillance.
The investigation’s many components
Binance was created immediately after BNB’s ICO, which took place at the height of the ICO fever in 2017. As a result, the emphasis of the investigation is on the company’s beginnings as well as those of its BNB coin.
The Securities and Exchange Commission is investigating whether the 2017 initial coin offering constituted the sale of a security that should have been registered.
The regulatory authorities are also looking into another tangent concerning CZ.
According to another source familiar with the investigation, the SEC is also looking into Zhao’s (also known as CZ) market-making operations. The SEC is investigating Zhao’s ownership shares in Binance.US market makers, as well as whether the exchange has engaged in the broker-dealer activity, according to the source.
As a result, Binance.com and Binance.US are two distinct enterprises. According to the exchange’s logic, the former is primarily for non-US consumers, whereas the latter is US-centric and offers items and services that are consistent with US federal and state rules.
Binance indicated in a statement that “it would not be appropriate for us to comment on our ongoing interactions with regulators, which include education, support, and voluntary responses to information requests.” The company also indicated that it works with authorities and that “all regulatory criteria will continue to be followed.”
The Securities and Exchange Commission (SEC) did not respond to a request for comment.
The SEC may have jurisdiction over investors who buy virtual currency to promote a company or project in the hopes of profiting from their efforts. This conclusion is based on a 1946 decision by the United States Supreme Court that established investment contracts.