Bloomberg reported on Monday that the US Securities and Exchange Commission (SEC) has opened an investigation against Binance. The leading company of cryptocurrency exchange platforms is once again in the sights of American justice, which suspects that the initial circulation of its token, the BNB, violated the law relating to securities.
Binance was already in the crosshairs of the SEC
In September 2021, the Commodity Futures Trading Commission, the federal body in charge of regulating the derivatives markets, had already opened an investigation to determine whether employees of the platform had committed insider trading and manipulated the markets through privileged information.
Separately, Binance has also been the target of money laundering charges that have led to new joint investigations by the Department of Justice and the Internal Revenue Service (IRS).
It does not stop there, last February, the SEC attacked the CEO of Binance, Changpeng Zhao, whom it suspects of sharing confidential information with two American companies, Merit Peak Ltd and Sigma Chain. These market makers carry out transactions on a continuous basis on the Binance US platform and thereby limit price volatility there, according to the Wall Street Journal. The American regulator wants to examine the nature of the ties that unite these two firms to the CEO of Binance following the revelation, in 2019, of corporate documents which would testify to their proximity.
Another blow for Binance
This week, the SEC again attacked the first cryptocurrency exchange. The federal agency, which boosted the capabilities of its crypto unit in early May, is determined to scrutinize the sector. This time she questions the legality of the BNB ICO in 2017 . The initial token offering may indeed have violated securities law. According to the latter, Binance was required to register this asset with the American authorities prior to any public sale. It’s a now classic accusation in the cryptocurrency industry, with several other companies having come under similar investigation .
Binance has not yet reacted to this new lawsuit. On the other hand, in a blog post promoted on Twitter, the platform refuted, on Monday, the accusations of money laundering of which it is the subject. She also claims that, citing a study conducted by Chainalysis, only 0.15% of cryptocurrency transactions could be linked to illegal activities. It also claims to have one of the most sophisticated anti-fraud systems on the market and recalls, in its words, an “ inconvenient truth ”: the vast majority of money laundering takes place via the traditional banking system.
Following the opening of this new SEC investigation, the price of BNB fell 11% in just over 24 hours, slipping below its key support level at $280 . It should be noted, however, that the other major cryptocurrencies have also suffered substantial falls over the same period of time.