The US Securities and Exchange Commission (SEC) is investigating whether Binance Holdings violated securities regulations when it launched its BNB token in an initial coin offering (ICO) five years ago, Bloomberg reported on June 6.
Binance is the world’s largest crypto exchange and BNB is the fifth largest cryptocurrency.
The BNB ICO took place in July 2017 across multiple platforms, at the height of the so-called ICO boom, and just a few days after that, the Binance exchange opened. According to Bloomberg, citing unnamed people familiar with the matter, at least one US resident said he took part in the ICO, which could be a decisive fact for the SEC case if the agency decides to file it. The SEC has stated that most cryptocurrencies are securities and has filed cases against a number of ICO projects.
Binance Founder and CEO Changpeng Zhao, often known as CZ, stated in a 2020 report. Blog Post that the wording of the BNB white paper was changed in January 2019 because “the potential for misunderstanding of the security is higher in some regions.” Later that year, the US arm of Binance, Binance.US, was created.
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Also May 6 reports Reuters. published a long special report alleging that Binance processed at least $2.35 billion of transactions through hacking, investment fraud and drug sales between 2017 and 2021 and had weak KYC/AML protection in those years.
Among other cases, Reuters mentions the Eterbase hack, in which part of the proceeds were laundered through Binance by the North Korean hacker group Lazarus, as well as Binance’s connection to the Russian-language drug store Hydra.
Binance spokesperson disputed Reuters findings, and the exchange said Forbes in a statement that the report is “a horribly misinformed article that uses outdated information from 2019 and unverified personal testimonies.”
Binance is already the subject of several US federal investigations, including another SEC investigation. The U.S. Commodity Futures Trading Commission (CFTC) launched an investigation into the exchange’s trading practices last year.
Binance Markets, its subsidiary in the United Kingdom, has received an order from the Financial Conduct Authority (FCA) to cease operations in the county after reviewing its activities last year. In addition, Binance was ordered to cease operations in Ontario last June, although it remained active in the Canadian province until March of this year.
Credit : cointelegraph.com