BNB investigated by SEC, Binance facing lawsuit?

The cryptocurrency launched by Binance, Binance coin (BNB), is under scrutiny by the US Securities and Exchange Commission (SEC). The regulator is investigating whether BNB was a security at the time of its launch. This means that the exchange may be facing a similar scenario as the ripple (XRP) lawsuit.

Binance in the crosshairs of the SEC

From an article by Bloomberg Yesterday it appears that the SEC has launched an investigation into BNB. The research would focus on the initial coin offering (ICO) of the altcoin in 2017. The SEC wants to find out whether BNB has properties of a security, or investment contract.

If this were the case, Binance would have had to register the sale of BNB with the SEC. The unregistered sale of securities is a criminal offense and can lead to heavy fines.

However, the SEC has not yet confirmed this news. Bloomberg is basing the news on statements from a person familiar with the case. Binance said in a statement to Bloomberg:

“It would not be appropriate for us to respond to our ongoing discussions with regulators, including education, assistance and voluntary responses to requests for information.”

BNB rate responds

When the news came out yesterday, the BNB share price reacted immediately. The uncertainty associated with an investigation and possible lawsuit is enormous. For example, the XRP price already fell hard when Ripple was sued by the SEC.

BNB had been in a downtrend for most of the day yesterday, but volume was still relatively low at the time. When the news came out, it suddenly went hard. Trading volume peaked and the price accelerated downward. The final damage at the time of writing is a decrease of 8.5%.

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As mentioned, XRP knows all about the SEC. The lawsuit between Ripple and the SEC has been going on for some time and is not expected to be completed until 2023.

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