Binance BNB Security Fears Emerge Following FTT Statement

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New concerns have arisen over Binance’s BNB after the United States Securities and Exchange Commission deemed FTT a security in a recent filing in the United States District Court for the Southern District of New York.

The SEC pointed out that FTT has a buy-and-burn program similar to a stock buyback program, and that they both achieve the same goal of increasing asset value. Binance also has a similar program for BNB with BNB Burn, which it launched in 2021.

Binance BNB Security Fears Emerge

Cory Klippsten tweeted that Binance.US may delist BNB due to the SEC’s designation of FTT as a security.

The same view was shared by Dave Warburton, who said that BNB and all other exchange tokens should be treated the same. According to Warburton, the credibility of the SEC would be “totally undermined” if it failed to label the security of the coins.

Most exchanges have avoided listing digital assets that the SEC might consider safe. For example, when the SEC filed a lawsuit against Ripple for XRP, Coinbase immediately delisted the coin. The only major exchange supporting BNB in ​​the US is its parent company subsidiary, Binance.US.

Is BNB like FTT?

FTT is the token of the FTX exchange. That’s it.

BNB, on the other hand, is *both* the native token of the BNB smart chain AND the token of the Binance exchange.

BNB is in no way like FTT.

Now I want you to be very careful in the future…

— B (Da Viking) (@100bviking) December 23, 2022

However, several community members countered that BNB is not similar to FTT. According to a December 23 Twitter thread from B, a senior contributor to Floki Inu, FTT was only the native token of bankrupt crypto exchange FTX, while BNB is not only the native asset of Binance but also that of BNB Smart Chain. B added that the BNB value comes from being the most widely used exchange token in the world and the most widely used blockchain.

Meanwhile, Binance CEO Changpeng Zhao said that a lot of 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 the DEX (beacon chain), and more.

BNB Price Struggles

BNB has lost 0.8% of its value in the past 24 hours to trade at $244.36 at press time.

Source: CoinMarketCap

Over the past seven days, the value of the Binance-backed coin has increased by more than 7%. However, its price has fallen more than 17% in the past 30 days due to growing concerns over the solvency of the exchange. The CZ-led company saw strong outflows of around $6 billion as users began withdrawing funds en masse.

A recent report also revealed that Binance is being investigated by US prosecutors for money laundering charges. On top of that, its auditor Mazars has removed its audit for the exchange on its website while revealing that it will stop its audit for crypto firms.

Disclaimer

BeInCrypto has reached out to a company or individual involved in the story for an official statement on recent developments, but has yet to receive a response.

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