New concerns about Binance’s BNB have surfaced in a recent filing before the US District Court Southern District of New York after the US Securities and Exchange Commission labeled FTT as a security.
The SEC highlighted that the FTT has a buy-and-burn program similar to a stock buyback program, and they both achieve the same goal of increasing the value of assets. Binance has a similar program for BNB with BNB Burn, which it plans to launch in 2021.
Binance BNB Security Fears Emerge
corey klipstein Tweeted That Binance.US may delist BNB as FTT is designated as a security by the SEC.
The same view was shared by Dave Warburton, who Said BNB and every other exchange token should be treated the same. According to Warburton, the SEC’s credibility would be “completely undermined” if it fails to label the coin a security.
Most exchanges have refrained from listing digital assets that the SEC might consider a security. For example, when the SEC filed a lawsuit against Ripple over XRP, Coinbase immediately delisted the coin. The only major exchange that supports BNB in the US is Binance.US, a subsidiary of its parent company.
However, many members of the community competition BNB was not the same as FTT. According to a December 23 Twitter thread from B, a major contributor to Floki Inu, FTT was just the native token of bankrupt crypto exchange FTX, while BNB is not only a native asset of Binance, but also of the BNB Smart Chain. B said that the BNB value comes from being the token of the world’s most used exchange and the most used blockchain.
Meanwhile, Binance CEO Changpeng Zhao said that many people “think that all ‘exchange tokens’ are the same.” CZ said:
“BNB has utility on Binance CEX. BNB is a native coin on two blockchains, BNB is DEX (Beacon Chain), and more.
BNB Price Struggle
At press time, BNB has lost 0.8% of its value over the past 24 hours and is trading at $244.36.
Over the past seven days, the Binance-backed coin had gained more than 7% in value. However, growing concerns about the solvency of the exchange have resulted in a drop of over 17% in its price over the past 30 days. The CZ-led firm recorded strong outflows of around $6 billion as users started withdrawing funds.
A recent report also revealed that Binance was being investigated by US prosecutors over money laundering allegations. Furthermore, its auditor Mazars removed its audit of the exchange on its website, while revealing that it would discontinue audits for crypto firms.
BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.