US regulators are investigating whether Binance Holdings Ltd. broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground five years ago, according to people familiar with the matter.
The Securities and Exchange Commission’s review pries into the firm’s origins and those of its BNB token, which is now the world’s fifth-biggest. Investigators are examining if the 2017 initial coin offering amounted to the sale of a security that should have been registered with the agency, said the people who were granted anonymity to discuss the confidential probe.
Scrutiny of BNB’s beginnings may be a troubling development for Binance as it faces multiple investigations in Washington. The SEC has brought dozens of enforcement actions over ICOs, which involve issuing virtual coins to raise money. BNB has been a feature of Binance’s expansive crypto empire.
In a statement, Binance said “it would not be appropriate for us to comment on our ongoing...
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