Binance Failing to Get US Exchange Listings for BNB Is Yellow Flag for Crypto Analysts

Binance, the world's largest crypto exchange by trading volume, has been the subject of recent crypto-market speculation after blockchain watchers discovered billions of dollars in deposit outflows, the company's auditor declined, and reports surfaced that the company may be under investigation by US authorities.

Such concerns are clearly evident in the recent decline of Binance's in-house coin, BNB: This month, the price has dropped around 17% to $245, far outperforming the CoinDesk Market Index of digital assets, which is down 5.7%. According to CoinMarketCap data, BNB reached a high of $690 in May 2021. The token's market valuation has decreased to about $40 billion, down from a high of $116 billion last year.

At the heart of the concerns is whether Binance will suffer a similar loss of faith as Sam Bankman-FTX Fried's exchange did in November. And it's tough to ignore that the first signals of serious trouble at FTX appeared when the exchange's own FTT coin began to fall.

As crypto analysts focus on the BNB token's pricing, they're also looking at the FTT token's trajectory for any red - or yellow - signs that could have alerted investors to the market's instability. And one important parallel shines out: Similarly to how FTX's FTT token failed to gain traction on major US crypto exchanges, BNB is not listed on a big number of US platforms. (It is available on Binance.US.)

Some crypto analysts suspect that large US exchanges may have avoided listing BNB for fear of coming afoul of regulations. Any regulatory difficulties could also pose a danger to token holders.

“Exchanges presumably don't include BNB because they regard it as a security risk given their network's centralization,” said Lucas Outumuro, head of research at IntoTheBlock. “It's probably not worth risking putting a security on a US exchange, especially if it's a competitor's token.”

FTT gets designated as a security

The issue was highlighted this week when the Securities and Exchange Commission designated FTX's FTT token as a security in a complaint.

The presence of FTT's “buy-and-burn” program was mentioned in the document as an example of how the token could be used as an investment. Such programs can be compared to stock buybacks, in which firms redeem their own shares on the open market in order to lower the outstanding supply and thereby boost the value of their stock.

Binance also has a burn program called “BNB Burn,” which was started in late 2021 and is explained on its website, which was last updated on Oct. 13.

“BNB is a deflationary currency, which means it maintains a steady value by burning its tokens during the year,” according to the website.

According to Sean Farrell, Fundstrat's head of digital asset strategy, BNB is unlikely to be listed on most domestic exchanges since it could be “deemed a security by regulators.”

WikiBIT requested Binance for a statement on the lack of BNB token listings on major US exchanges other than Binance.US, as well as whether management at the company were concerned that it would be classified as a security. As of press time, no response had been received. Previously, the official stated that BNB was listed on numerous major crypto exchanges outside of the United States.

What the exchanges say

“BNB is the cryptocurrency coin that underpins the BNB Chain ecosystem,” according to Binance's website.

“As one of the world's most popular utility tokens, you can not only trade BNB like any other cryptocurrency, but you can also use BNB in a variety of applications and use cases,” according to the website.

BNB can be used to “pay for goods and services, settle transaction fees on Binance Smart Chain, engage in exclusive token sales, and more,” according to the site. “Buy BNB Now,” a yellow button at the bottom of the web page says. Clicking this takes the user to another web page where they can log in to Binance or create an account.

BNB is listed on tens of crypto exchanges, including KuCoin, Huobi, and OKX, according to CoinGecko, a digital-asset markets pricing site.

Kraken, a US-based exchange, lists over 120 coins but does not provide BNB to its consumers.

According to a Kraken representative, “Kraken is an agnostic operator in the crypto market” and that it “has a thorough asset selection and listing method that guarantees assets receive the scrutiny and testing they deserve, including a rigorous compliance, legal, and security procedures.”

“If we haven't listed a popular asset yet, it's likely due to a variety of reasons, which may 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 do not support the network for the given token standard,” a Coinbase representative told CoinDesk.

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

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