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Binance is facing an investigation by the Securities and Exchange Commission (SEC) for possible violations of the United Securities markets law with the sale of Binance coins, according to a Bloomberg report.
Binance sold BNB tokens in 2017, which is now a crucial part of the exchange’s ecosystem. The exchange sold 100 million BNB tokens, half of its total supply, in its initial coin offering (ICO)
Initial Coin Offering (ICO)
An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born.
An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born.
Read this Term. The ICO whitepaper further mentioned that 85 percent of the raised funds would be used to build and market Binance’s global exchange platform.
Binance’s founding team, including the CEO Changpeng Zhao, held another 80 million of the reserved BNB tokens. The value of the token has skyrocketed over the years.
The US securities market regulator is primarily investigating whether BNB tokens can be categorized under securities, and if Binance violated the laws with the sale of unregistered securities.
Neither the SEC nor Binance has confirmed the reports of the investigation.
However, in a press statement, a Binance spokesperson said: “As the industry has grown at a rapid pace, we have been working very diligently to educate and assist law enforcement and regulators in the U.S. and internationally, while also adhering to new guidelines. We will continue to meet all requirements set by regulators.”
However, a regulatory investigation does not guarantee an enforcement action or a lawsuit against the exchange
Exchange
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading.
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading.
Read this Term.
Several Agencies Are after the Exchange
The possible investigation of the SEC is not the first one the crypto exchange giant will be facing. Binance is already facing investigations in the United States by the Justice Department, the Commodity Futures Trading Commission (CFTC) and the Internal Revenue Service.
Moreover, the US securities market regulator is investigating the ties of its US affiliate with two market-making entities, which are fully or partially owned by CE Zhao. Furthermore, Binance US is reportedly facing the probe of whether its employees are indulging in insider trading.
Meanwhile, the SEC is already fighting a legal battle with the blockchain company, Ripple for allegedly violating US securities laws with the sale of XRP tokens.
Binance is facing an investigation by the Securities and Exchange Commission (SEC) for possible violations of the United Securities markets law with the sale of Binance coins, according to a Bloomberg report.
Binance sold BNB tokens in 2017, which is now a crucial part of the exchange’s ecosystem. The exchange sold 100 million BNB tokens, half of its total supply, in its initial coin offering (ICO)
Initial Coin Offering (ICO)
An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born.
An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born.
Read this Term. The ICO whitepaper further mentioned that 85 percent of the raised funds would be used to build and market Binance’s global exchange platform.
Binance’s founding team, including the CEO Changpeng Zhao, held another 80 million of the reserved BNB tokens. The value of the token has skyrocketed over the years.
The US securities market regulator is primarily investigating whether BNB tokens can be categorized under securities, and if Binance violated the laws with the sale of unregistered securities.
Neither the SEC nor Binance has confirmed the reports of the investigation.
However, in a press statement, a Binance spokesperson said: “As the industry has grown at a rapid pace, we have been working very diligently to educate and assist law enforcement and regulators in the U.S. and internationally, while also adhering to new guidelines. We will continue to meet all requirements set by regulators.”
However, a regulatory investigation does not guarantee an enforcement action or a lawsuit against the exchange
Exchange
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading.
An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectively relevant with real-time pricing.Depending upon where you reside, an exchange may be referred to as a bourse or a share exchange while, as a whole, exchanges are present within the majority of countries. Who is Listed on an Exchange?As trading continues to transition more to electronic exchanges, transactions become more dispersed through varying exchanges. This in turn has caused a surge in the implementation of trading algorithms and high-frequency trading applications. In order for a company to be listed on a stock exchange for example, a company must divulge information such as minimum capital requirements, audited earnings reports, and financial reports.Not all exchanges are created equally, with some outperforming other exchanges significantly. The most high-profile exchanges to date include the New York Stock Exchange (NYSE), the Tokyo Stock Exchange (TSE), the London Stock Exchange (LSE), and the Nasdaq. Outside of trading, a stock exchange may be used by companies aiming to raise capital, this is most commonly seen in the form of initial public offerings (IPOs).Exchanges can now handle other asset classes, given the rise of cryptocurrencies as a more popularized form of trading.
Read this Term.
Several Agencies Are after the Exchange
The possible investigation of the SEC is not the first one the crypto exchange giant will be facing. Binance is already facing investigations in the United States by the Justice Department, the Commodity Futures Trading Commission (CFTC) and the Internal Revenue Service.
Moreover, the US securities market regulator is investigating the ties of its US affiliate with two market-making entities, which are fully or partially owned by CE Zhao. Furthermore, Binance US is reportedly facing the probe of whether its employees are indulging in insider trading.
Meanwhile, the SEC is already fighting a legal battle with the blockchain company, Ripple for allegedly violating US securities laws with the sale of XRP tokens.
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