Binance, the cryptocurrency exchange, announced that it will no longer support the trading of stock tokens. The decision was made in the context of continued crackdowns by regulators, and Hong Kong became the latest to announce that the platform did not provide such services under its jurisdiction.
Stock tokens can no longer be purchased on Binance.com
Based on daily trading volume, Binance, the world’s leading digital asset exchange, will stop supporting stock tokens. The token trading platform explained that this move is part of its ongoing evaluation of the product, but it also comes at a time when global regulators are putting increasing pressure on exchanges. On Friday, the crypto company stated:
Today, we announced that we will gradually reduce support for stock tokens on Binance.com to shift our business focus to other products.
The exchange noted that the suspension was “effective immediately” because it has been unable to purchase stock tokens on Binance.com. The platform will not support any stock tokens after October 14, 2021, but investors will be able to hold and sell them for the next 90 days.
The announcement further elaborated that “all stock token positions on Binance.com will be closed at 2021-10-15 13:30 (UTC).” Binance stated that the closing price will be based on actual trading after the opening of the market on October 15 Execution price. It warned that these prices may be different from those registered the day before. The Wall Street Journal quoted a Binance spokesperson as saying:
We believe that shifting our business focus to other products will better provide our users with long-term services.
Residents of the European Economic Area (EEA) and Switzerland can choose to transfer their stock tokens to the new portal that CM-Equity AG will launch in early October. Binance added that this transition will be subject to additional Know Your Customer (KYC) procedures, noting that all stock tokens listed on Binance.com are products issued and sold by Germany-based CM-Equity .
Hong Kong Securities Regulatory Commission warns against buying stock tokens on Binance
Binance’s decision coincides with growing concerns about the exchange’s unauthorized provision of tokenized stocks for other products and services. The list includes regulators in Italy, Lithuania, the United Kingdom, Japan and Germany. The Federal Financial Supervisory Authority stated earlier this year that tokens linked to shares of companies such as Tesla represent securities if they can be traded on cryptocurrency exchanges.
The Securities and Futures Commission of Hong Kong (SFC) became the latest agency to issue a warning to Binance. On Friday, the regulator stated that it “knows that Binance has provided stock token trading services in multiple jurisdictions and is concerned that these services may also be available to Hong Kong investors.” The SFC emphasized that “the Binance Group does not have any Entities are licensed or registered to carry out’regulated activities’ in Hong Kong.”
The committee stated in detail that according to the Securities and Futures Regulations of the Special Administrative Region of China, stock tokens are likely to be “securities.” If this is the case, they should be subject to the supervision of the Securities Regulatory Commission.
Regulators have warned that the marketing and distribution of such tokens, “whether in Hong Kong or for Hong Kong investors”, constitutes a “regulated activity” and requires permission. The Securities Commission emphasized that anyone who issued stock tokens in the city without registration could face criminal charges and urged potential investors to be “extremely cautious” when buying stock tokens on unregulated platforms.
What do you think of the current regulatory pressure on Binance, a cryptocurrency exchange? Tell us in the comments section below.
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