Suspected of money laundering, SEC investigates BNB? Binance responded one by one

Binance is in trouble, and has been accused by Bloomberg and Reuters in succession.

The U.S. Securities and Exchange Commission has launched an investigation into the cryptocurrency exchange Binance’s native token, BNB, according to a recent report from Bloomberg.

The SEC is investigating whether the founder Changpeng Zhao’s sale of BNB tokens during an initial coin offering (ICO) at Binance, the world’s largest cryptocurrency exchange, constituted an unregistered sale of securities in 2017, sources said.

In May, SEC Chairman Gary Gensler asked lawmakers to increase the agency’s executive budget as it seeks to require cryptocurrency trading platforms to register with the SEC. According to the SEC’s definition, many cryptocurrency exchanges are trading securities, not commodities, and should therefore be regulated by the agency. Investigations involving Binance Coin could take months to reach a conclusion, and regulators may not prosecute companies or individuals, according to a person familiar with the matter. But if the SEC does treat BNB as a security, that means Binance must comply with the agency’s regulatory and registration requirements.

Binance responded to Golden Finance: “As the industry grows rapidly, we have been working hard to educate and assist law enforcement and regulators in the U.S. and internationally , while also following new guidelines. We will continue to meet regulators all the requirements. ”

In fact, as early as 2019, Binance has intentionally differentiated itself from security tokens. In April 2019, Binance revised the white paper to delete the word “repurchase”. In the original version, the clause that “the company will use 20% of the profit to repurchase and destroy BNB every quarter” was changed to “every quarter the company will Destroy BNB based on Binance trading profits” to clear the securities attributes. A trending hashtag #UseBNB also appeared on Twitter in an attempt to illustrate that BNB is a utility token rather than a security token.

Still, once the SEC determines that BNB is a security, it could put Binance in a similar situation to Ripple Labs Inc. In December 2020, Ripple was sued by the SEC over the argument that “XRP is a security and not a token.” Affected by this incident, XRP experienced a delisting storm and was caught in a protracted court battle with the SEC.

Not only is it suspected of selling unregistered securities, but a recent Reuters article reported that an investigation into Binance’s financial activities revealed that the exchange platform facilitated laundering of no less than $2.35 billion in corrupt funds over five years.

In response to the alleged money laundering, Binance responded: “Ignore the authors and experts who pick the data, rely on unverifiable “leaks” provided by regulators, and fuel crypto paranoia for reputation or financial gain. Instead, just look at the facts .Neither our industry nor Binance is perfect, but we have grown by leaps and bounds over the past three years. Crypto is a whole new innovation. Like many regulators and policymakers, we are still working on the appropriate What the regulatory framework should look like . According to data from Chainalysis, a blockchain analytics firm specializing in crypto and blockchain analysis, 0.15% of all transactions using cryptocurrencies in 2021 will be related to some type of illegal activity. The United Nations estimates that 2% to 5% of traditional fiat currency (cash), approximately $800 billion to $2 trillion in current dollars, is related to some type of illicit activity. Cryptocurrencies are very transparent, more transparent than the traditional cash economy, This is well documented. ”

Affected by the turmoil in the cryptocurrency market, SEC investigations, and reports of suspected money laundering, BNB fell by more than 8% in the last 24 hours, and was recently quoted at $280.


Notably, Binance has indeed faced scrutiny from various U.S. regulators in recent years.

In the event of the Terra crash, the U.S. is preparing to file a massive arbitration against Binance, Gemini, Kraken, Coinbase for the sale of UST and LUNA to U.S. customers under securities laws. In February this year, the SEC also investigated the relationship between Binance US (Binance.US) and Changpeng Zhao’s two trading companies (Sigma Chain AG and Merit Peak Ltd). In addition, the U.S. Department of Justice and Internal Revenue Service are also closely watching Binance for possible money laundering and tax violations.

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