U.S. regulators are examining whether Binance Holdings violated securities laws by selling digital tokens just as the cryptocurrency exchange was launching five years ago.

Sources, who requested anonymity to discuss the private investigation, said investigators are scrutinizing whether the 2017 initial coin offering constituted the sale of a security that should have been registered with the agency.

The Securities and Exchange Commission is investigating the origins of the company and its fifth-largest cryptocurrency, called the BNB. 

As Binance confronts various probes in Washington, the scrutiny of BNB's origins may be a worrisome trend. 

Binance said in a statement that "it would be inappropriate for us to comment on our continuing talks with regulators, which include education, support, and voluntary replies to information demands." 

The SEC has brought dozens of enforcement cases over initial coin offerings, which include the issuance of virtual currency to raise capital. BNB has been a component of Binance's vast cryptocurrency empire.

The company noted that it collaborates with authorities and that they will continue to comply with all regulatory standards.

The SEC may have jurisdiction over a virtual currency if investors purchase it to sponsor a firm or project with the goal of benefitting from those efforts. 

This conclusion is based on a 1946 Supreme Court of the United States judgment defining investment contracts.

Binance, which operates the world's largest cryptocurrency exchange and claims to be non-domiciled with affiliates worldwide, has been a focus point for American investigators looking to rein in the cryptocurrency business. 

Bloomberg News has previously reported that the Justice Department, the Commodity Futures Trading Commission, and the Internal Revenue Service are investigating the company.

Prior to BNB's 2017 launch, Binance outlined its ambitions in a white paper. The document said that the token's circulation would be limited to 200 million, with half of the tokens sold via the ICO, which took place on numerous global platforms. 

Some $80 million dollars would be set aside for Binance's founding team, which includes its wealthy CEO, Changpeng Zhao.

In the white paper, which was read by Bloomberg, Binance stated that up to 85% of the ICO funding would be utilized to grow and promote Binance's global cryptocurrency exchange. There were no mentions of participation limits.

In order to attract investors to BNB, Binance has reduced trading costs for traders who pay using BNB. 

It has also paid many of its contractors in BNB, including at least one U.S. resident who claimed to have purchased BNB during the ICO, a fact that could be crucial for the SEC's assertion of jurisdiction in any potential action.