The U.S. Securities and Exchange Commission (SEC) is investigating whether Binance Holdings violated securities regulations when it launched an ICO to launch Binance Coin (BNB) five years ago , Bloomberg reported on June 6 .
Currently, Binance is the largest cryptocurrency exchange in the world, while BNB is the fifth-largest cryptocurrency by market capitalization.
BNB’s ICO took place on several platforms in 2017, at the height of the so-called ICO craze, and Binance Exchange officially opened for business a few days after that.
According to Bloomberg, citing unnamed sources familiar with the matter, at least one U.S. resident claimed to be involved in the ICO, a key fact if the SEC chooses to pursue it. The SEC maintains that most cryptocurrencies are securities and has sued several ICO projects.
In a 2020 blog post, Binance founder and CEO Changpeng Zhao (CZ) stated that the language in the BNB white paper was adjusted in January 2019 due to ” the possibility of being misinterpreted as securities in certain regions higher sex.” Binance established a US branch later in the same year.
Reuters also previously published a lengthy special report on May 6, alleging that Binance processed at least $2.35 billion in transactions from hackers, investment scams and drug sales between 2017 and 2021, and that during those years During this period, its know-your-customer (KYC) and anti-money laundering (AML) protections were weak.
Reuters also mentioned that the European cryptocurrency exchange Eterbase was attacked by hackers . Among them, the North Korean hacker group Lazarus laundered money through Binance, and Binance was also associated with the Russian-language drug market Hydra.
A Binance spokesperson refuted the Reuters report, and Binance issued a statement to Forbes, saying the report was “misleading, out of context, using outdated information and unverified individuals from 2019.” statement.”
Binance has been the target of multiple U.S. federal investigations, including another by the SEC. The U.S. Commodity Futures Trading Commission (CFTC) also began investigating Binance’s trading practices last year.
The U.K.’s Financial Conduct Authority (FCA) last year ordered Binance Markets, the U.K. arm of Binance, to reduce its activities in the country, after authorities reviewed its operations in the U.K. In addition, Binance was ordered to cease operations in Ontario, Canada last June, however, Binance continued to be active there until March of this year.