- The Binance platform is under the SEC investigation.
- Binance allegedly failed to register its Initial Coin Offering that happened in 2017
- Binance CEO’s relationship with the market-makers of Binance.US is also under investigation
The world’s largest crypto exchange platform by volume, Binance, is now in the spotlight. The securities and exchange commission (SEC) is investigating Binance for allegedly failing to register with the agency.
The US regulators claim that Binance did put on sale securities that were unlicensed during its initial coin offering (ICO).
SEC is investigating if Binance went against the regulations during its launch of the BNB token back in 2017 July. where it disposed off BNB at $0.15 each to the public as an ERC-20 token on the Ethereum blockchain.
The Initial Coin Offering
The BNB ICO was facilitated on several platforms which led to the launching of the Binance exchange just a few days afterward.
The SEC has shown concerns claiming that a large portion of cryptocurrencies is supposed to be treated as securities. This has raised more cases that are highlighting several other ICO projects.
Reportedly, SEC is also investigating Binance’s CEO, Changpeng Zhao’s relationship with market-making companies.
More allegations against Binance
According to the Reuters investigations, which were published on Monday 6th June 2022, Binance was involved in the processing of transactions that facilitated hacking, selling of illegal drugs and Investment frauds.
A total of $ 2.3 million was laundered between the years 2017 and 2021.
The crystal blockchain from Amsterdam showed that traders on Hydra, the largest and most hidden market for drugs, received payments of up to $750 million Euros ($800 million) through the exchange platform.
Reuters also revealed that Lazarus, a hacking group from North Korea, allegedly funded Pyongyang’s nuclear weapons program through Binance. In September 2020 a total of $5.4 million worth of cryptocurrencies were laundered from the crypto exchange platform.
Recently in January 2021, Reuters reported that until mid-2021 Binance’s money laundering checks on its users were not strong and effective. The Know-Your-Customer and Anti-Money Laundering were weak, which raised concerns from the senior officials of the company.
However, Binance has denied these allegations through a blog post stating that
Binance spokesperson claims that “The fact is that Binance has some of the strictest AML policies in the fintech industry and plays a significant leadership role in helping law enforcement deal with cyber and financial crime. Since the article ran, we have received an outpouring of support from partners in law enforcement across the globe.”
Binance also announced that it ceased the trading of some trading pairs and has delisted them. The trading pairs that have been removed include HOT/BNB, PERL/BNB, and SPELL/BNB.
