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The SEC is probing Zhao’s ownership stakes of market makers on Binance.US and whether the exchange has conducted broker-dealer activities. This has led to an extended drop in the BNB price.
Binance Coin (BNB), which is the native token of Binance, has dropped from trading at above $311 on Monday, June 6, 2022, to trading at the current price of $291.78 at the time of writing today.
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The price of BNB hit a weekly low of $274.71 on Tuesday, June 7, 2022 evening, according to data from CoinMarketCap.
Binance problems with the US SEC
The US Securities and Exchange Commission (SEC) is reportedly investigating Binance for a number of things including whether Binance has conducted broker-dealer activities.
The SEC is also probing whether the launch of the BNB token should have been registered with the Agency; in which case it would only be if the token is a security and not a cryptocurrency.
Currently, BNB is the fifth-largest cryptocurrency with a market capitalization of over $47.7 billion.
A report by Bloomberg stated that the “SEC has expressed interest in Zhao’s ownership stakes of market makers on Binance.US and whether the exchange has conducted broker-dealer activities.”
Binance has however remained mum on the investigations saying that it would not be appropriate for the exchange to comment on the ongoing conversations with regulators.
While the issue is yet to gather momentum, investors are wary not to end up in a similar scenario as is currently with the Ripple’s XRP, after the SEC argued that it viewed XRP as a security majority of exchanges delisted it on fears of running into problems with the SEC as well. And although the case between Ripple and the SEC is still open, a lot of damage has already been inflicted especially on those who had invested in the token.
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