The BNB token, with a market capitalization of approximately $40 billion, has been unable to secure a listing on major US crypto exchanges apart from Binance. This has led some crypto analysts to speculate that it could be due to the risk that the BNB token could be classified as a security by US regulators.
Binance, the largest crypto exchange in the world by trading volume, has recently been the subject of crypto market speculation following the detection of billions of dollars in deposit outflows, the departure of the company's auditor, and reports that the company may be under investigation by US authorities. This has contributed to the recent decline in the value of the BNB token, which has fallen by around 17% this month to reach $245. This decline is much steeper than the overall CoinDesk Market Index of digital assets, which has dropped by 5.7%.
At the root of these concerns is the possibility that Binance could experience a loss of confidence, similar to the rapid unraveling of the FTX exchange in November. One key similarity between the two situations is that, just as the FTX's FTT token struggled to secure listings on major US crypto exchanges, the BNB token is also absent from many US exchanges (except for Binance.US).
Some analysts speculate that major US exchanges may have avoided listing the BNB token due to the risk of encountering regulatory issues. Lucas Outumuro, head of research at IntoTheBlock, stated in an interview with CoinDesk, "Exchanges probably do not list BNB as they see it as security given the centralization of their network. It's probably not worth US exchanges risking listing security, especially if it's a competitor's token."
US SEC Designates FTX's FTT Token as a Security
The US Securities and Exchange Commission (SEC) recently designated the FTX's FTT token as a security in a complaint. The document cited the FTT token's "buy-and-burn" program as an example of how it could be intended to serve as an investment, similar to a company buying back its own shares to reduce the outstanding supply and increase its value.
Binance also offers a burn program called the "BNB Burn," which is described on its website as maintaining the BNB token's stable value through burning tokens throughout the year. This program was updated as recently as October 13, 2021.
US Exchanges Avoid BNB Listing Due to Regulatory Concerns
Sean Farrell, head of digital asset strategy at Fundstrat, has said that the BNB token is likely not listed on most domestic exchanges due to the risk that it could be "deemed a security by regulators." CoinDesk contacted Binance for comment on the lack of BNB token listings on major US exchanges aside from Binance.US, as well as whether executives at the company were concerned that the BNB token could be classified as a security. No response was received at the time of publication.
In a previous communication, a representative for Binance noted that the BNB token is listed on several major crypto exchanges outside the US. The BNB token is described on Binance's website as the cryptocurrency coin that powers the BNB Chain ecosystem and is considered one of the world's most popular utility tokens.
