Tether and Binance Coin Fall under SEC Spotlight: Attorney Jeremy Hogan

Attorney Jeremy Hogan, cautions that both Tether (USDT) and Binance Coin (BNB) are likely to be upcoming names in the legal entanglement of the SEC.

According to Attorney Jeremy Hogan, there are some top cryptocurrencies at risk on the SEC danger rating. Tether (USDT) and Binance Coin (BNB) are the two names disclosed by him. To determine securities laws violations the SEC relied on the Howey test to assess whether a transaction qualifies as an investment contract.

The “Howey Test” is an effective means of determining whether a financial instrument is an investment contract and security.He said,“Under the Howey Test, an investment contract exists if there is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.” Hogan said that his judgment is not to determine whether tokens will win or lose in a securities lawsuit. Instead, it concerns the chance of legal action by the SEC in his views.

Concerning Tether, Hogan briefly mentioned Tether’s $18.5 million settlement in February of this year with the New York Attorney General (NYAG). Bitfinex has paid a fine to end an investigation into allegations it tried to cover up a loss of $850 million. The NYGA also raised concerns about allegations that it was short of cash reserves to support Tether in circulation.

However, Hogan did not discuss how Tether stacks up against the Howey test criteria but ended up giving the stablecoin a 9/10 danger rating. About Binance Coin (BNB), Hogan believes that BNB is a form of an investment of money. Binance’s operations are very centralized- something that has long been preoccupied with cryptocurrency experts. He gave an illustration of Binance’s buyback coin burn policy. And gave BNB an SEC danger rating of 8.5/10.

Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.