As countries like El Salvador move forward with their plans to adopt cryptocurrencies, some tough guidelines and insecure investor behavior have put lawmakers, particularly the U.S. Securities and Exchange Commission (SEC) to investigate a possible violation of the Securities Act in a transaction related to the Coin Tether (USDT) and Binance (BNB).
To paint a picture, Federal Prosecutor Jeremy Hogan reported in a video about the five best crypto projects, in which he named USDT and BNB as currencies at risk in the SEC’s danger rankings.
While discussing the topic, Hogan demonstrated his expertise in legal technical issues related to cryptocurrencies and securities regulations.
In trying to determine whether or not the underlined market caps violate SEC regulations, the attorney appears to be using a US Supreme Court reference to “determine whether a transaction qualifies as an investment contract and is considered a security that the Subject to Disclosure, and Registration Requirements.”
How USDT and BNB could get the SEC’s bad cop treatment
In his analysis, Hogan explained how the SEC could take legal action against the aforementioned currencies, also referring to the 2020 USDT settlement with the New York Attorney General for $18.5 million.
The parent company behind the coin paid the $1 million fine after reporting it tried to hide $850 million in losses and did not have enough cash on hand to match the USDT in circulation support.
Hogan’s Hazard Rating for USDT: 9/10
Regarding BNB, the attorney mentions that while the coin forms an “investment” attribute, Binance is keeping the coin tight with its buy-back policy, citing narratives of undocumented revenue when its value increases.
This has made a bad impression on the entire block of the SEC, according to Hogan, which is trying to get some of the action as their rulebook dictates.
Hogan Hazard Rating for BNB: 8.5 / 10
SEC Position on Cryptocurrency Regulation
Regardless of Jeremy Hogan’s insincerity towards his avid YouTube listeners about complications with the USDT-BNB room, the Securities and Exchange Commission (SEC) isn’t too preoccupied with cryptocurrencies right now, Decrypt reports.
Instead, the agency creates rules for Special Purpose Acquisition Companies (SPACs) in areas related to short selling disclosure, market reforms, and a host of other issues that frankly don’t play a huge role in sales.
As the cryptocurrency market continues to gradually attract the attention of stocks, it is likely that this attention could drive investor sentiment to buy more and sell less, regardless of future legal action.
For reference only, Ripple’s XRP suffered severe slumps after being tried in 2017 for hiding some losses from the SEC.
But right now it’s still worth nearly $2.75 billion and the seventh-largest cryptocurrency by market cap. Whatever happens, rest assured that your investments will not be damaged when you have them.