By
Steve Muchoki
April 24th, 2024
Binance US arm, Binance.US, is also under investigation by the SEC. The watchdog wants to ensure that the US business is appropriately operating independently from the crypto company.
Popular crypto company, Binance, is currently under the watch of the SEC regarding the BNB token. The regulator is investigating if BNB was security at its initial coin offering in July 2017. SEC Chair Gary Gensler has always voiced about platforms hosting tokens that are classified as securities. Ripple has also been facing a similar probe with the SEC since December 2020. The watchdog alleged that the payment protocol sold illegal XRP. Since then, there has been a lot of drama, with many interesting happenings arising from the case.
SEC Investigates Binance
People familiar with the SEC vs Binance matter revealed that the Commission had not reached any conclusion regarding the probe. Following the news of the SEC investigation, the Binance coin, BNB coin, dropped 4.66% to $293. Meanwhile, BNB saw immense growth last year and is currently the fifth-largest cryptocurrency by market cap.
Binance US arm, Binance.US, is also under investigation by the SEC. The watchdog wants to ensure that the US business is appropriately operating independently from the crypto company. Furthermore, the Commodity Futures Trading Commission (CFTC) is reportedly inquiring if the world’s largest crypto exchange allowed US residents to trade on the platform.
Investigative Report Shows Binance Facilitated Crypto Theft for Five Years
Additionally, an investigative report by Reuters reveals that popular crypto exchange Binance facilitated crypto theft for years. The report explains that the crypto exchange aided investment funds, hacks, and sales of illegal drugs between 2017 and 2021. During the five years, fraudsters, hackers, and drug traffickers made Binance a conduit for money laundering. The report says at least $2.35 billion in illicit funds went through the world’s largest exchange. Court records, statements from law enforcement agencies, and blockchain data aided the calculation of the transactions. Also, two industry experts reviewed and agreed to the computation.
A North Korean hacking group dubbed Lazarus conducted one of the strings of cyber heists aimed at funding the nation’s nuclear weapons program. The hackers could get away with virtual currency worth about $5.4 million from a Slovakian crypto exchange, Eterbase. Hours after the attack, the hackers opened at least 24 anonymous accounts on Binance to convert the stolen funds. They were also able to conceal the money trail. Within nine minutes, the Lazarus hacking group created the Binance accounts and moved the stolen assets from Eterbase.
Till now, the Slovakian exchange has not been able to locate the funds or recover them. Co-founder Robert Auxt noted that Binance could not identify who was transferring the money on the exchange because the accounts were anonymous.
In addition, Chainalysis stated in a 2020 report that criminal funds that entered Binance totaled $770 million in 2019 alone. The US government hired the software company to track illicit flows of funds. In the report, Chainalysis noted that Binance facilitated criminal funds more than any other exchange in 2019. In reaction, the exchange’s CEO Changpeng Zhao blamed Chainalysis for “ad business etiquette.”
It’s interesting to note that Binance seems to have been prepared for this investigation. The exchange has spent tens of millions of dollars hiring the best cyber forensics team in the world, which includes over 120 security and industry experts from all over the world.