The $40 billion-market cap BNB token hasn’t been listed on major U.S. crypto exchanges – except on Binance.US. Crypto analysts say it might be due to concerns that BNB could be deemed a security.


In recent weeks, Binance, the world’s largest crypto exchange by trading volume, has been the subject of cryptocurrency market speculation after blockchain watchers discovered billions of dollars in outflows of deposits. In addition to reports that the company might be under FBI investigation, the company’s auditor begged off.


A clear reflection of these anxieties can be seen in Binance’s in-house token, BNB: Its price has dropped to $245 this month, well below CoinDesk’s broad digital assets index, which is down 5.7%. According to CoinMarketCap, BNB traded at $690 at its peak in May 2021. The token’s market capitalization has dropped to around $40 billion from a record $116 billion at one point in the past year.


Among the main concerns is whether Binance is susceptible to a loss of confidence similar to November’s stunning unraveling of Sam Bankman-Fried’s FTX exchange. When FTX’s own FTT token fell, the first signs of deep distress at the exchange could not be ignored.


Crypto analysts are scrutinizing the arc of the FTT token as they focus on BNB’s valuation to detect any red flags, or yellow flags, that could have warned investors about the fragility of the market in hindsight. In the same way as FTX’s FTT token did not get listed on major U.S. exchanges, so does BNB not appear on many U.S. exchanges. (Binance.US is the only exchange where it is listed.)


It is possible that some U.S. exchanges avoided listing BNB for fear of running afoul of regulators. Any regulatory issues could also pose a threat to BNB holders.


In an interview with CoinDesk, Lucas Outumuro, head of research at IntoTheBlock, said that exchanges don’t list BNB because they consider it a security threat. It is probably not worth it for U.S. exchanges to list a security, especially if it is a competitor’s token.


Security designation for FTT


A complaint filed by the U.S. Securities and Exchange Commission this week underscored the risk.


FTT’s “buy-and-burn” program was used as an example of how the token could serve as an investment, according to the document. The program is similar to a stock buyback, where companies redeem their own shares from the open market in order to reduce their outstanding supply.


In addition, Binance offers a burn program, called “BNB Burn,” which was introduced in late 2021 and has been updated as recently as October 13.


The website states that BNB is a deflationary currency, which means that its value is maintained by burning its tokens throughout the year.


Fundstrat’s Sean Farrell, head of digital asset strategy, says BNB is unlikely to be listed on most domestic exchanges because it could be considered a security.


CoinDesk asked Binance for a comment on the lack of BNB token listings on major U.S. exchanges besides Binance.US, as well as if Binance executives were concerned about the token being considered a security. As of press time, no response had been received. The representative stated in an earlier communication that BNB was listed on several major crypto exchanges outside the U.S.


Exchanges between the parties


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


Aside from trading BNB like any other cryptocurrency, you can also use BNB in a variety of applications and use cases, according to the website.


According to the site, BNB can be used “to buy goods and services, settle transaction fees on Binance Smart Chain, participate in exclusive token sales, and more,” based on its utility. When a user clicks on the yellow “Buy BNB Now” button at the bottom of the web page, they will be taken to another web page where they can sign up or log in to Binance.


CoinGecko, a digital-asset market pricing website, lists BNB on tens of crypto exchanges, including KuCoin, Huobi and OKX.


Kraken lists over 120 tokens, but does not offer BNB.


The Kraken spokesperson told CoinDesk that “Kraken is an agnostic player in the crypto market” and that it “has a robust asset selection and listing procedure that ensures assets receive the analysis and vetting they deserve, including strict compliance, legal, and security procedures.”


Coinbase representative, who has not yet listed BNB, told CoinDesk, “If we have not yet listed a popular asset, it is likely due to a number of reasons, which include: We have concluded that the asset does not meet our listing standards, we do not have enough information about the asset, additional technical integration work is required, or we don’t support the network for the given token standard.”


In a Friday note, Collin Howe, derivatives trader at B2C2, wrote, “BNB certainly is not in a position of strength.


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