Per a Bloomberg report, the U.S. Securities and Exchange Commission launched a probe against crypto exchange Binance’s native token Binance Coin (BNB). The Commission is investigating Binance Holdings Ltd., the report claims, for potentially breaking U.S. securities law.

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Binance was launched in 2017, and in July that year, it deployed its native token via an Initial Coin Offering (ICO). Binance Coin (BNB) was distributed amongst early backers and angel investors and the exchange’s core team.

The token was sold for 15 cents at its public sale, and it help Binance to raise around $15 million in funds. The money was used to improve the platform, growth, marketing, education, and more.

Citing people familiar with the matter, Bloomberg claims the Commission is investigating if Binance should have registered BNB as a security and if the ICO constitutes the illegal sales of an unregistered security. The token is currently of the most popular in the world and has been moving from the third to the fifth position in terms of market capitalization.

At the time of writing, Binance Coin (BNB) trades at $295 and records a 2% and 4% loss in the last 24-hours and 7-days, respectively. The token records over $48 billion in market cap, the number three token without counting stablecoins Tether (USDT) and USD Coin (USDC) and seems to be negatively reacting to the news.

Additional information claims the Commission might also be proving Binance.US, Binance’s subsidiary, to determine if the company is separated from its parent company business. Binance is yet to issue an official statement related to the investigation.

The crypto exchange platforms seem to be facing a day of negative news. Earlier today, Bitcoinist reported on a Reuter investigation claiming that Binance has enabled as much as $2.3 billion in money laundering through its platform.

Binance deny these accusations and highlighted its role in assisting law enforcement agencies to prevent criminals from levering its platform for illegal activities.

Binance Coin (BNB) The New XRP?

The U.S. SEC has launched legal actions against crypto-based companies for allegedly selling unregistered securities. Most notoriously, the Commission is currently in a legal battle against payment company Ripple and two of its executives for this reason.

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The legal battle is yet far from over, but recent developments don’t seem to favor the regulator. In that sense, legal expert Collins Belton commented the following on the probe against Binance Coin (BNB):

It’s been 5 years and it’s mcap is higher than most US companies, why wait this long to take potential action if you’re concerned about potential harm? Letting things balloon only to prick it once massive seems like a recipe for inducing consumer harm rather than staving it off.