BNB: Binance Sued by SEC for Securities Violation, BNB Plummets
- Binance and its founder “CZ” have been sued by the SEC for operating an unregistered securities exchange.
- The lawsuit caused its native token to drop by almost 10%, and the crypto’s total market cap to shed roughly $50bn in a single day.
- It’s uncertain what will come of the lawsuit, but crypto investors are undoubtedly spooked.
Yesterday, the largest crypto exchange in the world was sued by the Securities and Exchange Commission (SEC) for allegedly breaching multiple securities laws. Both Binance and its founder/CEO Changpeng Zhao have been hit with 13 separate charges, and have been accused of operating an unregistered securities exchange and “enriching themselves while placing investors’ assets at risk.”
News of the lawsuit seems to have spooked both Binance’s native token and the crypto market as a whole. BNB dropped by close to 10% yesterday, and Bitcoin also logged a more than 5% drop on the news. In response, CEO Changpeng Zhao (CZ) tweeted that “Our team is all standing by, ensuring systems are stable…” However, it wasn’t enough to stop more than $750m being removed from the exchange in the hours following the announcement.
Binance has recently been coming under quite a bit of pressure, with CZ being hit with a $1bn lawsuit two months ago for supposedly paying celebrities to endorse unregistered securities. Whether this latest suit will amount to anything however, remains to be seen. Unlike in the case of FTC, Binance’s stablecoin reserves are still looking healthy.
(About BNB)
BNB, or Binance Coin, is a cryptocurrency that was created by the popular cryptocurrency exchange called Binance. It was initially launched as an ERC-20 token on the Ethereum blockchain but later migrated to its own blockchain called Binance Chain. BNB serves multiple purposes within the Binance ecosystem. Firstly, it is used as the native cryptocurrency on the Binance exchange, allowing users to pay for trading fees and participate in token sales hosted on the platform. By using BNB to pay for fees, users can enjoy discounts and other benefits, making it a popular choice for frequent traders. BNB has been integrated into various applications and services, including decentralized finance (DeFi) platforms, where users can stake or lend their BNB to earn rewards. BNB has also found use in Binance Launchpad, which hosts token sales and initial coin offerings (ICOs) for new projects.