Binance Failing To Obtain US Exchange Listings For BNB Is A Yellow Flag For Crypto Analysts

Binance, the largest crypto exchange in the world by trading volume, was the at the center of speculation in the cryptocurrency market in recent weeks after blockchain watchers detected billions of dollars worth of deposit outflowsof the company listener begged and reports have emerged that the company may be under investigation by US authorities.

These concerns are clearly reflected in the recent downward trajectory of Binance’s internal token, BNB: The price fell around 17% this month to $245, significantly underperforming the wide CoinDesk Market Index digital assets, down 5.7%. At the May 2021 high, BNB changed hands at $690, according to data from CoinMarketCap. The token’s market capitalization has fallen to around $40 billion from a record high of $116 billion at some point last year.

At the heart of the concerns is whether Binance could be subject to a loss of confidence similar to November’s incredibly rapid collapse of Sam Bankman-Fried’s FTX exchange. And it is impossible to ignore that the first signs of deep distress at FTX appeared when this exchange itself The FTT token has started to plunge.

So, while crypto analysts focus on the BNB token’s valuation, they’re scrutinizing the FTT token’s arc for any red — or yellow — flags that, in hindsight, might have warned investors of fragility. of the market. And one key similarity stands out: just as FTX’s FTT token had generally failed to list on major US crypto exchanges, BNB is also absent from a large number of US exchanges. (It is listed on Binance.FR.)

Some crypto analysts believe that major US exchanges could have avoided a BNB listing for fear of clashing with regulators. Any problems on the regulatory front could also represent a risk for the holders of the token.

“Exchanges probably don’t list BNB because they consider it a security given how centralized their network is,” Lucas Outumuro, head of research at IntoTheBlock, said in an interview with CoinDesk. “It’s probably not worth the risk of US stock exchanges listing a security, especially if it’s a competitor’s token.”

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FTT is designated as security

The risk was highlighted this week when the U.S. Securities and Exchange Commission labeled FTX’s FTT token as a security in a complaint.

the document pointed to the existence of FTT’s “buy-and-burn” program as an example of how the token could be intended to serve as an investment. Such programs could be compared to a stock buyback, where companies buy back their own shares on the open market to reduce the current supply and thus increase their value.

Binance also offers a burning program, introduced in late 2021, labeled “Burn BNB,and detailed on its website and updated as recently as October 13.

“BNB is a deflationary currency, meaning it maintains stable value by burning its tokens throughout the year,” the website states.

According to Sean Farrell, head of digital asset strategy at Fundstrat, BNB is unlikely to be listed on most national stock exchanges because it could be “considered a security by regulators”.

CoinDesk asked Binance for a comment on the lack of listings of BNB tokens on major US exchanges besides Binance.US, and also whether company executives were concerned that this would be considered a security. No response has been received at press time. In an earlier communication, the representative noted that BNB is listed on several major crypto exchanges outside of the United States.

What the exchanges say

According to Binance’s website, “BNB is the cryptocurrency coin that powers the BNB Chain ecosystem.”

“As one of the most popular utility tokens in the world, not only can you trade BNB like any other cryptocurrency, but you can also use BNB in ​​a wide range of applications and cases. of use,” the website says.

In terms of the token’s utility, BNB can be used “to pay for goods and services, settle transaction fees on Binance Smart Chain, participate in exclusive token sales, and more,” according to the site. A yellow button at the bottom of the webpage says “Buy BNB Now”. One click leads to another Web page where a user can log into Binance or create an account.

According to CoinGeckodigital asset marketplace pricing site, BNB is listed on dozens of crypto exchanges, including KuCoin, Huobi, and OKX.

US exchange Kraken lists over 120 tokens but does not offer BNB to its clients.

A Kraken spokesperson told CoinDesk that “Kraken is an agnostic player in the crypto market” and that it “has a robust asset screening and listing process that ensures assets receive the analysis and verification they deserve, which includes rigorous legal and security compliance”. treat.”

A Coinbase representative, who also did not list BNB, told CoinDesk, “If we have not yet listed a popular asset, it is likely due to a variety of reasons which may include: we have concluded that the asset doesn’t meet our listing standards, we don’t have enough information about the asset, additional technical integration work is needed, or we don’t support the network for the given token standard.

“BNB is certainly not in a strong position, which will likely continue as thorny Binance questions remain,” B2C2 derivatives trader Collin Howe wrote in a Friday note.