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FTX Token Declared a Security, Does it Set a Dangerous Precedent for the Binance Coin?

2 mins
Updated by Sheikh Bilal
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In Brief

  • The SEC classified FTT as security in a complaint against Caroline Ellison and Gary Wang.
  • The community draws similarities between BNB and FTT
  • Will the SEC classify BNB as a security?
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The US SEC has called FTX Token (FTT) a security. Does it set a dangerous precedent for the Binance Coin (BNB)?

The Securities and Exchange Commission (SEC), in a complaint against Alameda Research CEO Caroline Ellison and the co-founder of FTX Gary Wang, has claimed FTT as a security. Caroline Ellison and Gary Wang pleaded guilty on Wednesday, Dec. 21, according to the U.S. attorney for the Southern District of New York.

FTX Token, a Security

The SEC referred FTT sale as a security in the 38-page complaint filed by the SEC to the U.S. District Court Southern District of New York. The SEC claims that “From the time of its offering, FTT was offered and sold as an investment contract and therefore a security.”

The complaint makes bold claims that “The FTT materials made clear that FTX’s core management team’s efforts would drive the growth and ultimate success of FTX,”

Miles Deutscher, the renowned crypto analyst, believes that this move from the SEC “could set a dangerous precedent for other tokens.”

Binance Coin in Trouble?

After the collapse of FTX, Binance is facing the heat from the crypto Twitter. The community has pointed out similarities between BNB and FTT. There are speculations if Binance will meet the fate of FTX. 

Crypto experts have pointed out, “It is possible that Binance uses its own coins (Binance USD stablecoin and BNB token), which are in the top 10 capitalizations, for reinvestment. If the assumption is correct, the risk of a cascading liquidation cannot be ruled out, following the example of FTX.”

Source: Twitter

The similarities between BNB and FTT have also led to speculations if the SEC will classify BNB as a security by the SEC. The community believes that FTT being declared a security set a dangerous precedent for all the exchange tokens like BNB.

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Harsh Notariya
Harsh Notariya excels in delivering SEO-optimized crypto news under tight deadlines. Previously, as a Growth Marketer at Sporty and a Community Consultant at Totality Corp, he significantly boosted community engagement and followers. Harsh also crafted engaging content for top crypto influencer Shivam Chhuneja, blending meme references for an educational yet fun experience. His versatile skills make him a notable figure in crypto journalism.
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