Binance's initial coin offering may have overstated the success

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Binance's initial coin offering may have overstated the success

A report in Forbes on Oct. 5 found that Binance may have significantly overstated the success of its initial coin offering for Binance Coin in 2017 due to a lack of momentum in the market.

Binance's founder and CEO, Changpeng Zhao, began to conceptualize BNB and circulate a white paper for the asset in June 2017 after the sale, according to the report. Binance completed BNB's ICO in July, at which time Zhao declared the offering a success. According to Zhao, the ICO had raised $15 million and said BNB's price averaged $0.15 per token.

Binance's white paper also revealed details about token allocations, which meant that it would mint 200 million BNB tokens. At its end, Binance and its executives secured 80 million tokens for Binance, 20 million for angel investors, and 100 million for ICO investors.

The actual allocations, however, tell a different story, finding that ICO investors actually received 10.78 million BNB rather than 100 million BNB - about one-tenth of the amount they supposedly received. Binance also said it raised close to $5 million during its first offering, instead of $15 million.

Moreover, angel investors also received a doubled token distribution that actually amounted to 40 million, instead of 20 million, BNB tokens.

Binance may have a huge amount of value - up to 65 million unsold tokens and up to 80 million BNB allocations - as a result of the revised sale results.

Binance and its members continue to control the extra tokens, according to blockchain analysis. It concluded: ''I'm happy that I have done this. ''

BNB has a market value of $33 billion and is the fourth-largest cryptocurrency.

Binance's request for comment was declined by CryptoSlate at press time.