Binance has come under regulatory scrutiny again, this time with the SEC. The United States Securities and Exchange Commission (SEC) recently launched an investigation on the behemoth cryptocurrency exchange to ascertain whether it violated securities laws with its BNB token initial coin offering (ICO) five years ago. The latest regulatory report was published by Bloomberg on Monday, citing several commentators familiar with the case.
The crypto exchange could be put under similar treatment as Ripple Labs, which has been battling the regulatory agency in court since December 2020, if the agency discovers that the BNB sale of 2017 was an unregistered security offering. The SEC sued Ripple and some of its executives for allegedly organizing an illegal sale of XRP tokens.
However, a source familiar with the matter told Bloomberg that an SEC enforcement probe into BNB could take months to reach any conclusion.
Commenting on the development, Binance explained to news outlets that “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.” Regardless, the company asserted that it will “continue to meet all requirements set by regulators.”
Binance Faces Multiple Investigations in the US
Due to previous legal run-ins with US authorities, the behemoth exchange operates as Binance.us in the North American nation. The giant trading platform asserted that Binance.com and Binance.us “are separate entities.”
Meanwhile, Binance.us recently issued a statement noting that it remained “committed to upholding the highest standards of compliance.”
The Bloomberg publication also detailed that the crypto exchange was facing several investigations in Washington. The SEC is running investigations on possible trading abuses by Binance insiders and also probing market-making firms linked to Binance CEO Changpeng Zhao (CZ).
BNB suffered a sharp 11% decline on Monday following the announcement of the investigation. At press time, the fifth-largest cryptocurrency trades at $288.
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