BNB, the native token of the Binance blockchain, dropped more than 7% to $283 after Bloomberg reported that the US regulators are investigating whether Binance Holdings Ltd broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground five years ago.
“Binance Coin (BNB) has been on a downtrend since the last couple of days as the US S.E.C. launched an investigation against Binance’s native token. The commission is probing Binance Holdings Ltd. in connection with breaking the U.S. securities law. The hourly chart for BNB has broken below the triangle pattern. An immediate support for Binance coin is expected at the $221 level,” said WazirX Trade Desk.
The US Securities and Exchange Commission’s (SEC) review pries into the firm’s origins and those of its BNB token, which is now the world’s fifth-biggest cryptocurrency, as per CoinGecko.
Investigators are examining if the 2017 initial coin offering amounted to the sale of a security that should have been registered with the agency, sources told Bloomberg.
In a statement, leading crypto exchange Binance said “it would not be appropriate for us to comment on our ongoing conversations with regulators, which include education, assistance, and voluntary responses to information requests.” The company added that it works with authorities and will continue to meet all requirements set by regulators.
Binance Coin (BNB) is an exchange-based token created and issued by the cryptocurrency exchange Binance. Initially created on the Ethereum blockchain as an ERC-20 token in July 2017, BNB was migrated over to Binance Chain in February 2019 and became the native coin of the Binance Chain.
The BNB token is down about 45% since the beginning of this year (YTD), and is far away from its record high of $686 it had hit in May last year.
(With inputs from Bloomberg)