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.”
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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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.