Binance Token A Security Not Listed In U.S. Crypto Exchanges
Crypto analysts have Binance in their crosshairs, and they find the exchange of China-born Changpeng “CZ” Zhao to be on the verge of collapsing, with its BNB token regarded as a security by the market and US Securities and Exchange Commission (SEC).
Photo Insert: Binance has been the focus of much speculation after blockchain watchers detected billions of dollars of deposit outflows, the company’s auditor quit and reports emerged the company might be under investigation by US authorities.
Reporting for CoinDesk, which exposed the FTX scam through Ian Allison, Lyllah Ledesma stressed that Binance has been the focus of much speculation after blockchain watchers detected billions of dollars of deposit outflows, the company’s auditor quit and reports emerged the company might be under investigation by US authorities.
BNB’s price skidded about 17% this month to $245, much worse than the 5.7% decrease in value of other digital assets. The token’s market capitalization has dropped to around $40 billion, from a record $116 billion last year.
She noted that the FTX debacle started when its own FTT token started to plunge. Binance also has a "buy-and-burn" program like that of FTX, which is akin to stock buyback, where companies redeem their own shares from the open market to reduce the outstanding supply and thus increase their value.
Binance also offers a burn program, introduced in late 2021, labeled “BNB Burn,” and detailed on its website and updated as recently as Oct. 13.
Sean Farrell, head of digital asset strategy at Fundstrat, said BNB is likely not listed on most domestic exchanges due to the fact it could be “deemed a security by regulators.”
Worse, an investigation by Reuters showed that $10 billion in illicit funds passed through Binance and more than $250 million in assets of criminal syndicates were withdrawn through its network.
These findings were separate from the SEC’s discoveries as the agency continues its inquiry, which has led to the US Department of Justice mulling criminal charges against Zhao and Binance.