Securities and Exchange Commission (SEC), in a complaint Against Caroline Ellison, CEO of Alameda Research, and Gary Wang, co-founder of FTX, have claimed FTX as a security. Carolyn Allison and Gary Wang pleaded guilty on Wednesday, December 21, according to the US Attorney for the Southern District of New York.
FTX Token, a security
The SEC referred to the FTT sale as a security in a 38-page complaint filed by the SEC in the US District Court Southern District Court of New York. The SEC claims that “from the time of its offering, the FTT was offered and sold as an investment contract and therefore a security.”
The complaint boldly claims that “the FTT materials make clear that the efforts of FTX’s core management team will drive the growth and ultimate success of FTX,”
Renowned crypto analyst Miles Deutscher believes that the SEC’s move “could set a dangerous precedent for other tokens.”
Binance Coin in trouble?
Crypto experts have pointed out, “It is possible that Binance uses its own coins (Binance USD stablecoin and BNB token), which are in the top 10 capitalization for reinvestment. If the assumption is correct, then the risk of cascading liquidation following the example of FTX cannot be ruled out.
The similarities between BNB and FTT have also led to speculation as to whether the SEC will classify BNB as a security by the SEC. Community believes that That FTT being declared a security sets a dangerous precedent for all exchange tokens like BNB.
BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.