Binance Coin (BNB) May Be the Fourth-Largest Crypto in the World, but Here's Why It's Still a Sell

For now, BNB (CRYPTO: BNB) is worth selling for most investors, even though it's the fourth-largest cryptocurrency and up 240% in the last three years alone. That significantly outperformed most other crypto majors, including Bitcoin, Ethereum, and XRP. So why should people avoid a coin that has tended to gain value over time?

In short, BNB is the native coin of BNB Chain, a blockchain that grew out of Binance, a major crypto exchange that operates worldwide. Binance had $11.4 trillion in trading volume in the first half of 2026, and reported 323 million registered users as of July. A new federal case just put the exchange back in the spotlight for the wrong reasons -- and it isn't the first time legal issues have brought Binance bearish tidings.

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Binance paid $4.3 billion in 2023, and it might pay more soon

On Sept. 14, the U.S. Department of Justice (DOJ) said it had moved to seize about $61 million in crypto funds that were tied to Iranian oil sales, which are subject to sanctions. The DOJ alleges that two China-based companies laundered the proceeds of those oil sales through trading accounts at Binance.

Binance isn't presently named as a defendant in the case. The federal complaint's claims are just allegations for now, and Binance denied any wrongdoing when it received earlier reports about the two companies.

On that note, in February of this year, a Senate subcommittee requested the exchange's records on the same two businesses, stating that "Binance appears to have ignored warnings and recommendations to prevent Iranian money laundering schemes on its cryptocurrency exchange." That doesn't exactly seem like a favorable way to be mentioned by Congress.

There's also some history that's worth knowing here. In 2023, Binance pleaded guilty to violations of anti-money laundering laws and sanctions violations, and agreed to pay $4.3 billion in penalties.

Should you sell BNB?

The link between BNB's value and the financial health of the Binance exchange is looser than you might think.

Its quarterly Auto-Burn mechanism is configured to permanently destroy coins based on BNB's price and the chain's block production, and BNB Chain says the process runs independently of the exchange. So BNB could keep some value if Binance paid another large penalty, since the chain would still collect network fees.

But it's also unavoidable that the centrality of Binance's exchange in the crypto sector drives much of its demand, and any wider seizures could rapidly pour cold water on users' sentiment. And again, this wasn't the first incident in which BNB Chain was the site of activity that U.S. authorities took issue with. For any banks or institutional investors looking to allocate funds to crypto, BNB's association with Binance and its less-than-sterling reputation may well make it a non-starter for investment.

There's not much reward awaiting those who take the risk and buy this coin anyway. Therefore, I suggest selling BNB if you hold it.

Alex Carchidi has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool recommends BNB. The Motley Fool has a disclosure policy.