Binance said on Friday that it will no longer accept “stock tokens,” which are crypto-assets linked to the value of certain stocks. The move was made to “shift our commercial focus to other product offerings,” according to the crypto exchange behemoth. Binance was told by Germany’s financial authority in April that the introduction of the tokens had possibly breached securities laws.
As Binance confronts increased regulatory pressure across the globe, the exchange will no longer sell digital representations of equities like Tesla, Apple, and Coinbase.
Binance’s Tokenized Stocks
Binance previously partnered with CM-Equity AG, a German-licensed investment company headquartered in Germany, to sell the tokens. Based on data from Binance, each token is completely backed by CM-Equity AG shareholdings.
The Binance team said that stock tokens could not be purchased on the platform, “immediately.” After Oct. 14, the business will no longer provide support for any stock tokens, and customers have 90 days to either sell or retain the tokens.
From approximately two to four weeks before Binance shuts all positions on Oct. 15, European customers will be able to transfer their holdings over to a new “portal” from CM-Equity AG.
Germany’s financial authority issued a warning to investors that the introduction of Binance’s equity tokens may have been in violation of securities regulations since investors were not provided with a prospectus for the instruments.
Stock tokens provided by Binance enable users to purchase a small percentage of shares in publicly listed businesses without paying commissions. Apples, Coinbase, Microsoft, MicroStrategy, and Tesla are all on sale in this deal. The firm’s USD-pegged stablecoin, Binance USD, was used to determine prices.
Binance’s Regulation Issues Worldwide
Regulators from across the globe are now cracking down on Binance. Binance has recently been blocked from providing services like asset management in the UK and financial services in Italy.
In Japan, Canada, and Thailand, other regulatory bodies have issued concerns regarding Binance as well.
Thailand’s financial authority (or securities regulator) filed a criminal complaint against the exchange for operating an unregulated digital asset business without a license, and the Financial Conduct Authority of the United Kingdom issued a similar prohibition to the exchange just a few days before.
Binance is functioning unlawfully in Japan, according to the Japanese authorities. The German securities regulator warned in April that issuing securities tokens linked to stocks may lead to penalties.
Customers in Ontario were also invited to withdraw their money before the end of the year, as long as any open transactions were concluded beforehand.
According to the Cayman Islands Monetary Authority, Binance has been banned from operating as a cryptocurrency exchange in or from the Cayman Islands (CIMA).
Binance, on the other hand, maintains that it has no physical presence while stressing the significance of its compliance standards in the past.
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