Binance is under investigation by the SEC to determine if the Holdings broke securities rules when it launched its BNB token in an ICO stage in 2017.
The BNB ICO took place in July 2017 on several platforms during the height of the ICO boom, followed by the opening of the exchange a few days after. According to reports at least one U.S. resident claimed to have taken part in the ICO, which could be a critical fact for an SEC investigation. The SEC has claimed most cryptocurrencies are securities and brought cases against a number of ICO projects.
Reuters published a detailed report claiming that Binance processed at least $2.35 billion of transactions from hacks, investment frauds and narcotics sales between the year of opening in 2017 to 2021, and had a fairly fragile KYC and Anti-Money Laundering protections for those years.
Reuters also mentions the hacking of Eterbase, with some of the proceeds being laundered through Binance by North Korean hacker group Lazarus, and Binance’s association with Russian-language drug mart Hydra.
A Binance spokesperson disputed Reuters’ findings, and the exchange stated that the report is a misinformed op-ed that uses outdated information from 2019 and unverified personal testimonies.”
Binance is already the object of several U.S. federal investigations, including another SEC probe. The U.S. Commodity Futures Trading Commission began an investigation of the exchange’s trading practices last year.
