Bloomberg: SEC Launches Investigation For Binance’s BNB Token

The US Securities and Exchange Commission (SEC) is investigating whether the Binance BNB token was a security at the time it was sold in 2017. It was reported by Bloomberg, citing sources.

The launch of Binance Coin (BNB) took place in July 2017. It was originally an ERC-20 token on the Ethereum blockchain. In April 2019, the asset migrated to its own blockchain.

During the ICO, 100 million BNB was sold for $0.15. Of the total 200 million token emissions, 10% were received by business angels and 40% were reserved for the team of project founders.

The whitepaper set no limits for those participating in the token sale. According to Bloomberg, the regulator is aware of at least one US citizen who purchased BNB in ​​the original sale. This allows the SEC to establish its authority to review ICOs for possible violations of US securities laws.

Broadcast sources noted that the investigation would not necessarily lead to any lawsuits and could take months.

Binance said it “did not find it appropriate to comment on ongoing communication with regulators, including training, assistance, and voluntary responses to information requests.”

The commission is separately examining the activities of the American division of Binance regarding insider trading and the activities of market makers associated with the exchange’s founder, Changpeom Zhao.

“Binance.US is a separate US-focused commerce platform that offers local users products and services that comply with US federal and state regulations,” the company said.

In the background of the news, BNB dropped 8% in one day to ~$281.

As a reminder, Reuters analysts have calculated that between 2017 and 2021, cybercriminals laundered at least $2.35 billion of illegally obtained money through Binance.