In a video examining the “SEC Danger rating” of the top five cryptocurrencies by market cap, attorney Jeremy Hogan said that both Tether and Binance Coin might be the next targets of an SEC lawsuit.
What Happened: Hogan, who is a partner at Hogan & Hogan, gained popularity after posting brief videos about his opinion on the legal proceedings unfolding between XRP issuer Ripple Labs and the U.S. Securities and Exchange Commission.
Based on the arguments made by the SEC in its legal case against XRP, Hogan named controversial stablecoin Tether as a coin that might be liable to an SEC lawsuit.
The attorney gave Tether a 9/10 on his danger rating scale, citing the company’s recent $18.5 million settlement with the New York Attorney General (NYAG).
Tether’s parent company Bitfinex paid the fine to end the investigation into an alleged cover-up of an $850 million loss.
Hogan also named Binance Coin (BNB) as another token that might face legal action from the SEC, giving the coin a danger rating of 8.5/10.
Analyzing BNB under the Howey test, Hogan pointed out that Binance carried out an ICO or Initial Coin Offering back in 2017.
“Now this is the exact thing that Chairman Clayton and new SEC Chairman Gensler have basically said is an investment contract,” he said.
“To make matters worse, the control of the Binance coin is very centralized. In fact, in order to maintain the value of the coin, Binance buys back and burns coins every quarter and even said in its whitepaper that the purpose of doing so is to keep the coin scarce and valuable.”
Last month, SEC Chairman Gary Gensler went on record to state that “a lot of crypto tokens are indeed securities” and plans to bring them back into the rules.