SEC Going After Binance And It's BNB Shitcoin
We've come a long way since the days of creating your own shitcoin and paying the listing fee to get on binance or if you cant afford it give them a big stake of premined tokens to market make with and create an IDO using their launch pad.
Lol, when Binance? When Moon? Am I right?
Binance had a great casino, it was making money but that was never going to be enough for CZ, the team, and their band of investors. The golden age of centralised exchanges was a brief period in history and with services like stablecoins, a lot of trading is moving on-chain as blockchain companies want to keep value in their ecosystem and earn as much transaction fees as possible.
Fee compression has started to pinch the bums of centralised exchanges and once ETH DEFI started to gain traction those juicy fees are starting to produce less yield.
If you can't beat them, fork them
So what do you do when ETH and these other chains start to eat into your profits? You launch your own shitcoin chain of course, and they did just that forking ETH and removing proof of work and creating an even more centralised proof of stake version that offered cheaper fees.
Five years have gone by and BNB and its so-called smart chain have been a hit for the company, extending their services into the customers they were losing, pulling in customers that they weren't able to reach who preferred to use on-chain services and gobbling up their fees
With everything running smoothly in establishing a multi-billion dollar parallel service to its centralised service and then launching a multi-billion dollar stable coin option on top of it. Binance was off to the races.
Until now, as I keep telling people the wheels of justice move slowly, but the SEC has finally caught up and are looking into the BNB ICO to establish if it is, in fact, a security or not.
Now anyone with a half functioning brain can tell you it passes all 4 points of the Howey test but the burden of proof is now on the SEC and Binance and its army of lawyers and lobbyists are going to try and put all sorts of stories between them and the facts.
The crypto exchange is not only dealing with the BNB token ICO but face multiple investigations such as possible trading abuses by Binance insiders, and the securities regulator is also probing market-making companies tied to Binance CEO Changpeng Zhao (CZ).
Slap on the wrists
While the news did hit the BNB token slightly with an 11% drop, most crypto bros feel it's too big to fail, that they'll get a slap on the wrist, pay a fine as BlockFI and EOS did, and continue operating.
History has shown that white-collar crime is hardly seen as serious in the crypto space and with enough money you can make things go away.
However, this time could be different, could Binance be the poster boy for coming down hard on shitcoins? Personally, I doubt it. A sad reality, as many people have been hurt by these predatory practices.
Source:
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, "I am a Jessie."
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Interesting take. I didn't quite get what were the "predatory practices" you refer to ... offering similar or better services for lower fees ?
Also I'm surprised that on the basis of an SEC investigation (this is what the SEC is paid to do, it investigates traditional finance too) you directly jump to "white collar crime" as though they were already guilty ... To hell with the presumption of innocence, who needs that? You are investigated for something? Well, you are already guilty! Endearing, indeed ...
Needless to say I disagree completely with your view but, hey, it's been an interesting read !
Why don't you spend less time simping for CZ and open up a non-google search engine and look at the list of shady shit binance has done instead of wasting my time making this comment?
Binance Uganda - Scam, they used it as a shell company to do money laundering
Binance launch pad launched a host of rug pulls
Binance has been suspected in a host of money laundering cases
Where there is smoke their fire, seriously do your research man. I am not here to hold your hand, if you want to get ripped off by these scammers go ahead
Haha, ah the good old days.
:)
Anyway...
While BNB is obviously a security, Binance will get a slap on the wrist, pay a fine that has zero bearing on their business and continue as if nothing happened.
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I wish it would be more than that, I am so sick of CZ and his bullshit, his just another Justin Sun with deeper pockets
I don't quite see why "BNB is obviously a security" ? It's been issued as a pure utility token: you buy it with fiat and you use it to pay tx fees and your tx fees will be lower - basically like a "gift card" where you "front load" your tx fees - binance gets cash upfront, you get lower tx fees. Are prepaid, gift cards "securities" ? Where's the "investment peddled with a an implicit promise of appreciation" ? I mean, what part of the Howey test does it pass cause I don't see
Yes and with the advent of BSC the utility went through the damn roof. They've also been around so long (much like XRP) without minting new tokens (in fact they do burns instead) that it's very hard for the SEC to make their case. Like, it's not even a US-based company.
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https://www.businessinsider.com/personal-finance/howey-test
Already we can see a massive amount of holes in the concept that "You're a fucking idiot if you don't understand how this obviously passes the Howey Test." First of all, nothing is obvious when it comes to legal matters. Strike one just for the tone of the message. An investment where the success is linked to Binance corporation? That's not true because there are a ton of random devs working on BSC worldwide. That completely destroys both the vertical approach and the broad vertical approach. The horizontal approach also fails because obviously all the money is not going to the same enterprise, as there are clearly multiple enterprises.
The expectation of profit also completely fails for the reason you stated: utility.
Not only does BNB have utility on the exchange side with reduced fees,
but also BSC opens the doors for infinite utility to be built (again maybe not even by Binance)...
Let's take that point you raise, how does token burning differ from a company buying back their stock?
There are similarities between an airplane and a bird yet that doesn't make a bird an airplane nor the opposite ...
Imagine an issuer of gift cards who has issued 50000 gift cards but only managed to sell 10000 and it says "ok, I didn't manage to sell all the cards I issued, I'll destroy a part of those I printed but didn't manage to sell".
Great article! Thanks
Ah so you can guarantee me that Ripple Labs is going to lose their lawsuit against the SEC? Actually, no, you can't. There are many arguments to be made that both XRP and BNB are not securities. I'm not going to make the claim that they are good arguments, but they very well may be good enough to win in court considering the resources being allocated to the defense.
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So what's your point? That if someone has enough cash to lobby and pay off politicians they can continue to shill their securities to retail and skirt regulation? Of course, they can, they've carved out a grey zone to dump on retail and profit without actually creating a product just selling narratives.