Cryptocurrency exchange giant Binance is reportedly under investigation by the U.S. Securities and Exchange Commission (SEC), which is probing the sale of the crypto company’s native coin BNB.
According to a Bloomberg report on Monday (June 6, 2022), the US watchdog is looking into Binance’s initial coin offering (ICO) back in 2017 to check if the exchange’s BNB token was sold as an unregistered security.
Anonymous sources noted that the SEC investigation into the BNB token is “likely months away from any conclusion.” Although the Commission is yet to release an official statement, a Binance spokesperson 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. We will continue to meet all requirements set by regulators”.
Apart from probing BNB, the SEC is also investigating the exchange for possible insider trading and also checking if the company’s United States affiliate (Binance.US) is independent of the global trading platform.
In addition, the US securities watchdog is reportedly scrutinizing market makers connected to Binance CEO Changpeng “CZ” Zhao.
The latest development comes shortly after a Reuters investigative report revealed that the exchange giant served as a channel for laundering illicit funds worth at least $2.35 billion.
Binance has come under regulatory scrutiny from other American regulators like the Commodity Futures Trading Commission (CFTC) and the Internal Revenue Services (IRS).
Meanwhile, the company could face the same fate as Ripple if the SEC sees BNB as a security token. The latter is in a court battle with the regulator after it alleged that Ripple conducted a $1.3 billion unregistered security offering.
Later on, CZ published a company’s statement on the matter, trying to debunk the money-laundering allegations through a detailed email exchange with Reuters.
BUILD debunks FUD.
This is 50+ pages of email records between our cyber security team (ex-law enforcement background) and the cherry picking, misleading, and time wasting journalists.
If you have time to waste, see the details and truth for yourself.https://t.co/Y8bAvS5edk
— CZ Binance (@cz_binance) June 6, 2022