The Binance cryptocurrency exchange is in the US Securities and Exchange Commission’s doghouse, according to Bloomberg.
The wire service reported Tuesday that the SEC is investigating the creation of Binance’s holding company and its BNB cryptocurrency’s initial coin offering (ICO).The investigation dates back to 2017, when BNB was launched.
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Citing undisclosed sources, Bloomberg reported that US regulators are investigating whether Binance Holdings broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground.BNB ranks as the world’s fifth-largest digital coin based on market capitalization.
Binance issued a statement saying that it would not be appropriate to comment on the company’s ongoing conversations with regulators, Bloomberg reported.The company pledged to continue to meet all regulatory requirements.
The SEC declined to comment, according to Bloomberg.
In an interview with Capital.com, Howard Greenberg, president of the American Blockchain and Cryptocurrency Association, predicted that the SEC’s probe will take years.He pointed to the fact that the SEC’s 2020 lawsuit against Ripple, backer of the XRP coin, which involves similar allegations, is only entering the discovery stage.
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The SEC has alleged that Ripple conducted a $1.3bn unregistered securities offering.The judge overseeing the case convened a conference call on Tuesday
He made the comments on the same day that two US senators introduced a bill that calls for cryptocurrencies to be regulated as commodities.
If it becomes law, the proposed legislation will provide long-sought federal oversight for US cryptocurrencies.
“We’re looking at something that was done five years ago,” said Greenberg, referring to the SEC’s investigation of Binance.“This is exactly why we need [federal cryptocurrency] regulations, because for the last five years we haven’t had a clear path that brings ICOs to light.”
News of the SEC investigation came one day after Reuters, citing its own investigation, reported that Binance served as a conduit for the laundering of $2.35bn worth of illicit funds.According to Reuters, some of the laundered money included funds stolen by North Korea’s Lazarus group, which created Binance accounts.And, the Binance exchange was used to process transactions linked to hacks, investment frauds and illegal drug sales.
Binance has acknowledged that the exchange has been involved with stolen funds, but Reuters said the company’s chief communications officer, Patrick Hillmann, called the $2.35bn figure inaccurate.
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Binance facing other probes
According to Bloomberg, Binance is also being investigated by the US government’s Justice Department, Commodity Futures Trading Commission, and Internal Revenue Service.
Meanwhile, two other popular cryptocurrencies – Cardano ( ADA ) and Dogecoin ( DOGE ) – made headlines for different reasons in recent days.
Cardano continued to defy a macroeconomic downturn that has hit the stock and crypto markets, seeing its price rise.
In Tuesday afternoon trading in North America, Cardano was up for both the day (1.39%) and week (0.41%) and ranked sixth based on market capitalization.
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Cardano takes opposite approach
Several other altcoins – digital coins other than bitcoin ( BTC ) – such as Solana ( SOL ) were down noticeably on both the day and week.
“Cardano has definitely taken the exact opposite approach from most crypto projects,” said Greenberg.
He added that the foundation behind the coin operates very slowly and methodically, and its research is peer-reviewed.
“There is frustration, though, here in the crypto space because a lot of people prefer to run before they can walk,” said Greenberg.
Cardano’s recent increases have been attributed to investors’ anticipation of gains from its upcoming blockchain network upgrade, known as the Vasil hard fork at the end of June.
But Greenberg said Ethereum’s upcoming upgrade, known as the Merge, is a bigger deal for him personally.Under the Merge, the Ethereum network will change from more expensive proof-of-work staking to a proof-of-stake system.
The change is expected to reduce Ethereum’s energy consumption and lower transaction-processing fees considerable.
“It’s the apple that hangs above the crypto world,” said Greenberg.
On the other hand, DOGE, a closely watched meme coin, was among digital assets that suffered drops Tuesday, continuing a months-long trend.On Monday on Twitter, DOGE co-founder Billy Metcalf attributed the coin’s decline to the overall crypto market’s downfall.
He tweeted a chart that showed Google searches for DOGE have plunged during the past year.
DOGE is down about 90% from its all-time high of $0.7376 in May 2021, U.today reported, now trading for a fraction of a cent..
