Is FTX a security and how will BNB react?

The US SEC has designated the FTX Token (FTT) as a security. Does this set a dangerous precedent for Binance Coin (BNB)?

The Securities and Exchange Commission (SEC) claimed FTX as a security in a complaint against Alameda Research CEO Carolyn Ellison and FTX co-founder Gary Wang. Carolyn Allison and Gary Wang pleaded guilty on Wednesday, December 21, according to the US Attorney for the Southern District of New York.

FTX Token, a security

The SEC referred to the FTT sale as a security in a 38-page complaint filed by the SEC in the US District Court Southern District Court of New York. The SEC claims that “from the time of its offering, the FTT was offered and sold as an investment contract and therefore a security.”

The complaint boldly claims that “the FTT materials make clear that the efforts of FTX’s core management team will drive the growth and ultimate success of FTX,”

Renowned crypto analyst Miles Deutscher believes that the SEC’s move “could set a dangerous precedent for other tokens.”

Binance Coin in trouble?

Following the collapse of FTX, Binance is facing heat from crypto Twitter. community pointed out Equality Between BNB and FTT. Speculations are rife whether Binance will meet the same fate as FTX.

Crypto experts have pointed out, “It is possible that Binance uses its own coins (Binance USD stablecoin and BNB token) for reinvestment, which are in the top 10 capitalization. If the assumption is correct, then following the example of FTX The risk of cascading liquidation cannot be ruled out.

source: Twitter

The similarities between BNB and FTT have also led to speculation as to whether the SEC will classify BNB as a security by the SEC. Community believes that That FTT being declared a security sets a dangerous precedent for all exchange tokens like BNB.

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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.

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