Tether and Binance Coin, next assets in the SEC’s sights

  • Crypto lawyer Jeremy Hogan stated that the same rationale that regulators have used against Ripple could be applied to Tether and Binance Coin.
  • For the lawyer, Tether’s legal background in the United States makes USDT next on the list.
  • Binance could be in trouble running a business model similar to Ripple’s.

Tether (USDT) y Binance Coin (BNB) they occupy the third and fourth position by market capitalization. The growth of these two cryptocurrencies has been such that apparently have been flagged by the United States Securities and Exchange Commission (SEC).

According to the expert lawyer who has handled the different Ripple (XRP) cases, Jeremy Hogan, the cryptocurrency of the world’s largest exchange, BNB, and the most important stablecoin, USDT, They are at risk from possible SEC actions.

For himthe same rationale that regulators have used since 2020 against the Ripple case, crypto firm behind XRP that has been accused of selling non-SEC registered securities for a total of $ 1.3 billion, pThey could be used on both Binance Coin and Tether.

Such coverage of the Ripple case has made Hogan and his law firm Hogan & Hogan aware of the details, complexities and legal subtleties that the SEC applies when opening cases against companies with their own cryptocurrencies.

Why can these two cryptocurrencies be accused?

One of these details can be found in the “Howey test”, a method the SEC has used against Ripple to evaluate whether a transaction with cryptocurrencies can be called an “investment contract or not”.

According to the Howey test, an investment contract exists if there is an investment of money in a joint venture with a reasonable expectation of profit from the efforts of others. “, said the lawyer.

This evidence is a legal antecedent of 1946, where WJ Howey, is accused by the SEC for having sold orange plantations in Florida to investors, who later re-leased the land from Howey.

After this operation, it was the same Howey company that dealt with the management of the plantations and the sales of the oranges on behalf of the owners. Howey did not record the earnings with the SEC, and the court ruled against the citizen, as it was determined that the lease agreement qualified as an investment contract and therefore should be regulated by the SEC.

Tether would be the first on the list … again

It is worth noting that the company behind the handling of USDT, Bitfinex, paid a fine of more than $ 18.5 million dollars at the beginning of the year to the Attorney General of New York for them to leave behind the investigations against him.

Which also led the State of New York to prohibit any business operation of Bitfinex and Tether in that territory. These investigations have alerted the SEC that it also wants to ensure that the business behind this cryptocurrency is also legal, in Hogan’s opinion.

Although it is worth noting that Hogan did not disclose how the SEC could use the Howey test against Tether. But despite this, pFor him, the legal background in the United States makes USDT next on the list.

Binance may be in trouble

Although the lawyer put Tether at the top of the list, for Hogan, The world’s largest crypto exchange may be in serious trouble due to its resemblance to Ripple’s business model.

In Hogan’s words, surely for the SEC BNB perfectly forms a “money investment” of the Howey Test. Furthermore, the ICO launched by the crypto exchange in 2017 also coincides with the accusations against Ripple.

“Is there an investment of money? Yes, you buy the coins. And where did the coins come from? Well, Binance had a genuine Initial Coin Offering in 2017. This is exactly what Chairman Clayton and new SEC Chairman Gensler have basically said is an investment contract.”, Said the lawyer.

Also, another point that could play against Binance and its cryptocurrency BNB, is the fact that the management of crypto is very centralized. One of the points that could bring you more problems in the eyes of the SEC is the case of the constant burning of coins that the firm has made.

For Hogan, this perfectly understandable phenomenon in the cryptocurrency ecosystem; “Well at the end of the day you’re an alternative to fiat money”Which is not seen with good eyes by traditional regulators. Well, they observe a market manipulation in order to increase the value of the BNB and, therefore, the profit expectation, mentioned in the Howey Test.

Do you think the price of BNB is in danger? Can Tether get out of another legal bind? Don’t miss the answers to these questions on Bitcoin México, your favorite crypto news portal in Spanish.

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Tether and Binance Coin, next assets in the SEC’s sights

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