Registered securities broker eToro is the home to 10 million users, and they have continued to add to the cryptocurrencies listed on their platform. On Monday, they released an annoucement that they would be adding Binance’s BNB token to their listing. The brings their official count for cryptocurrencies to 13.

Anyone that holds BNB or purchases it can use it on the eToro exchange, trading it at a discount. BNB is one of the few tokens on the market that has managed to increase their price since the start of the year, starting at $8.60 in January, and is presently trading at $9.44, despite about a 2% decrease in the last 24 hours. The token was originally issued through an initial coin offering with Binance, resulting in a $15 million funding round.

Along with the addition of BNB, some market observers have expressed concern due to the way that this design appears to be similar to a security. As most crypto users known, securities are ruled by regulatory agencies typically, like the US’s SEC or the UK’s FSA.

Preston Byrne, who is a fellow of the Adam Smith Institute, spoke with Block via email and commented, “BNB Coin is quirky in that it likely includes a promise from Binance, if not formally in a contract then [by implication] through the company’s public statements, to repurchase the coin using a portion of profits made by the platform over the prior quarter.”

Byrne added that the current structure is most like a dividend, which is often available to shareholders as a type of payment. He said,

“This looks a lot like a dividend, a type of payment normally associated with shares, and might, if the regulator woke up on the wrong side of the bed one morning, be viewed as “securities equivalent to shares” even though BNB Coin is not, in form, an equity security.”

Any company that decides to support the trading securities is bound by the regulations of the SEC, if they are based in the United States. Unfortunately, up until this point, the agency still has neglected to determine which coins are considered securities. Due to this lack of information, some cryptocurrency platforms have limited themselves to only supporting a few assets. However, in the UK, Byrne says that there are not any securities laws that impact ICOs. Byrne commented,

“If I had to hazard a guess, I suspect Binance and eToro have analyzed the risk of enforcement from UK regulators and concluded the risk exists but is very low.”

A senior market analyst for eToro, Mati Greenspan, spoke with The Block about the process that eToro must have gone through to ultimately decide to add BNB. Greenspan explained,

“We’ve seen thousands of ICOs over the course of 2017. And they were all trying to get this magic formula for a utility token, but Binance was one of the only ones to nail it.” Due to these reasons, regulators may not deem BNB a security.

SEC chair Jay Clayton had said back in February that “every ICO I’ve seen is a security,” months after Binance held its ICO in July last year. The SEC has since created a division that specifically deals with ICO startups, though some market observers saw this move as a way that the authorities are showing a gentler approach.

The SEC has been open about their aggressive action against many ICO projects, but the majority of them were being toted by untrustworthy individuals. Centra is a perfect example, raising $32 million despite being charged with fraud.

On BNB, Greenspan questioned the ability of the token to be traded within the United States, though he remains open. He said,

“I personally wouldn’t be afraid of doing that. Speaking from my point of view, if the regulator says you should not offer that, then what is the big deal. They’re not going to put anyone in jail for that.”

Even so, Greenspan spoke about the firm’s possibility of denying BNB to the investors in the United States, if there were any issues with this addition. He said,

“While eToro’s trading platform isn’t yet on offer to U.S. users, when we do launch into the country, we’ll only offer tokens that mean we’re fully compliant with local regulations.”

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