The US Securities and Exchange Commission (SEC) is investigating Binance’s BNB, the fifth-largest cryptocurrency over some suspicions.
Binance native token, BNB, dropped as much as 11% after the news of the investigation broke. The token was trading at an average price of $279.6 at press time.
Other exchange-linked tokens, such as Kucoin’s KCS and FTX, have dropped more than 5% each.
BNB faces more difficulties, losses 22% in the last 30 days
The Securities and Exchange Commission (SEC) is investigating whether Binance Holdings Ltd.’s initial coin offering (ICO) violated the commission’s securities rules, according to reports. The ICO under investigation was launched in 2017 by the world’s largest crypto exchange.
The agency is looking into people’s private affairs during the company’s launch, as well as those involved with the BNB token. Officials are inspecting whether the BNB offering amounted to the sale of a security that should have been registered with the Commission. The SEC’s investigation has exacerbated the difficulties faced by the world’s largest crypto platform, which is already afflicted by a slew of legal and controversial issues.
Meanwhile, the BNB token has dropped over 22% in the last 30 days, amid the crypto market experiencing a great downturn. Its overall market capitalization has dropped to $45.6 billion. Its circulating supply amounts to 162.2 million units.
Additionally, a Reuters investigation report on Monday accused the company of enabling over $2.5 billion in illegal transactions over a few years. The charges were refuted by Binance.
SEC opens investigation into several initial coin offerings (ICOs)
Binance has chosen to remain silent about the ongoing conversations with the commission. It went on to say that it works by the authorities and will continue to meet all of their requirements. Many investigations have recently been started by the regulatory authority over offerings that involve issuing virtual tokens to raise funds.
According to the report, the cryptocurrency exchange outlined its plans in a white paper before the BNB’s launch. The document stated that the BNB circulation would be limited to 200 million. While half of the tokens are sold through ICO on numerous platforms globally. It included that Binance’s founding team would also set aside another 80 million tokens. CZ, the CEO of Binance, was included in this list.