Binance Under SEC Investigation Over Its 2017 ICO Listing: Report

The investigation comes amid a separate report by Reuters alleging Binance facilitated $2.35 billion in illicit funds between 2017 and 2020


Binance’s Changpeng Zhao


key takeaways

  • Binance is reportedly being probed by the US securities regulator over allegations it failed to register its ICO in 2017
  • The SEC is also investigating Binance CEO Changpeng “CZ” Zhao’s connection to Binance.US market makers

US regulators are reportedly probing Binance over its 2017 initial coin offering (ICO), adding additional pressure to the embattled exchange currently facing accusations of having facilitated billions in illicit funds in recent years.

The world’s largest crypto exchange by trading volume is in the SEC’s spotlight over allegations it may have failed to register its token as a security with the agency. The agency is determining if a possible breach of US securities laws occurred.

Bloomberg first reported the news Monday, citing people close to the matter who wished to remain anonymous due to the confidential nature of the ICO investigation. Blockworks attempted to contact the SEC but did not receive a reply by press time.

The SEC is also reportedly looking at market-making companies connected to Binance CEO Changpeng “CZ” Zhao whose ownership stakes of market makers on Binance.US have piqued the regulator’s interest, Bloomberg reported. Binance.US and Binance are separate entities.

“We have been working very diligently to educate and assist law enforcement and regulators in the US and internationally,” a Binance spokesperson told Blockworks while not commenting directly on the probe. “We will continue to meet all requirements set by regulators.”

Public ICOs were a popular crowdfunding method in bygone years designed to raise funds for budding crypto projects and ecosystems. They have since fallen out of favor following legal uncertainty.

Binance raised $15 million over the course of 16 days from its ICO listing five years ago where it sold binance coin (BNB) for $0.15 each to the public as an ERC-20 token on the Ethereum blockchain. BNB was last seen changing hands for around $283, down 19.86% year to date, according to Messari data.

Bloomberg’s reporting comes amid a separate report by Reuters on Monday alleging Binance processed $2.35 billion in illicit transactions between 2017 and 2020 which are said to have derived from hacks, fraud and the illegal sale of drugs.

Reuters has leaned on two industry experts as well as a 2020 report by blockchain analytics firm Chainalysis to arrive at its multi-billion dollar figure. Blockworks attempted to contact Chainalysis to corroborate but did not receive a response by press time.

It’s the latest string of accusations facing the exchange which landed in regulatory hot water last year over its alleged failure by regulators to appropriately register its business in jurisdictions such as the UK, Italy and Singapore. Binance has no official headquarters.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research



Akash is a general-purpose compute platform with GPUs, storage, LLM training or inference, and validator hosting through its two-sided marketplace.


Bankman-Fried jotted down a balance sheet one day before FTX declared bankruptcy


The SEC is mulling over 13 bitcoin ETF proposals that are continuously being updated ahead of expected rulings next month


Details on the 2024 airdrop are coming into focus


Changpeng Zhao may be using his time in the US to meet with founders, according to posts on X


The token will be used to govern the DAO — and possibly to rouse activity in Solana DeFi


The investing app’s crypto trading revenue had dropped by 55% in the third quarter, but its volumes rebounded in November