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SEC legal action over BNB token prompts fears over which altcoin is next

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The SEC launched an investigation into Binance to determine if its BNB token was a security offering in a 2017 sale, according to Bloomberg News. informed.

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In particular, the supervisory authority checks whether the BNB Initial Coin Offering (ICO) meets the definition of a sale of securities without registration.

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Binance’s statement on the matter rephrased the situation as an “ongoing conversation” with the SEC, adding that the firm continues to comply with all regulatory requirements.

“It would be inappropriate for us to comment on our ongoing conversations with regulators, which include training, assistance and voluntary responses to requests for information.”

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In weighing the situation, Swan Bitcoin founder Corey Clippsten wondered if “other centrally controlled and issued exchange tokens” were at risk. Moreover, the same can be said for all altcoin ICO offerings with a central authority, not just exchange tokens.

Social media chatter is filled with comments about the situation and how altcoins in general may be affected in the future.

What is happening with the altcoin market now?

BUT Reddit post discussion of the status of altcoin securities required community feedback on the situation.

Based on the relatively low number of votes for any comment, it’s reasonable to assume that the community is somewhat divided over what’s next for altcoins or which token is next.

Comments ranged from zero to attacks on the SEC and its chairman, Gary Gensler. Interestingly, one Redditor referred to the ongoing SEC lawsuit against Ripple and said that the regulator’s case against Ripple is “currently failing.”

Considering that XRP is the “most secure altcoin,” according to the author, it goes without saying that the SEC is unlikely to spend its “limited resources on more complex cases.”

One thing that was not mentioned by the author is a potential legal precedent for the outcome of the case. Ripple’s victory will ease some of the concerns of the altcoin community. However, the case is likely to extend to 2023which makes you wait a long time.

Is Bitcoin the only safe game?

In 2021, prosecutor Jeremy Hogan, commenting on the Ripple case, gave an assessment of five cryptocurrencies that, in his opinion, are on the “SEC danger list”. Somewhat prophetically, Hogan named BNB and USDT. On BNB he said:

“Is there an investment? Yes, you buy coins. And where are the coins from? Well, Binance had a real initial coin offering, ICO, in 2017. This is exactly what Chairman Clayton and new SEC Chairman Gensler called an investment contract.”

Meanwhile, Bitcoin Maximalist Max Keyser intervened and said “yes!” BNB is an unregistered security.”

Bitcoin does not have a central controlling authority, and BTC tokens first appeared through mining, which in the early days could be done by anyone with a computer, i.e. there was no ICO.

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