The cryptocurrency exchange Binance has announced that it will no longer support trading in stock tokens. The decision comes against the background of continued crackdown by regulators, with Hong Kong being the last to state that the platform is not licensed in its jurisdiction to provide such services.
Share tokens are no longer available for purchase on Binance.com
Binance, the world’s leading exchange for digital assets by daily volume, is discontinuing support for stock tokens. The coin trading platform stated that the move was part of the ongoing valuation of products, but also amid increasing pressure on the exchange from regulators around the world. On Friday the crypto company said:
Today we announce that we will be discontinuing support for share tokens on Binance.com to shift our commercial focus to other product offerings.
The exchange pointed out that the suspension is “effective immediately,” with share tokens already unavailable for purchase on Binance.com. The platform won’t support stock tokens after October 14, 2021, but investors can hold and sell them for the next 90 days.
The announcement further states that “all stock token positions on Binance.com will be closed on October 15, 2021 at 1:30 p.m. (UTC)”. Binance said closing prices will be based on the prices actually executed after the market opens for trading on October 15th. It was warned that these could deviate from the courses registered the day before. A Binance spokesperson was quoted as saying by the Wall Street Journal:
We believe that shifting our commercial focus to other product offerings will better serve our users in the long run.
Residents of the European Economic Area (EEA) and Switzerland have the opportunity to transfer their share tokens to a new portal that will be launched by CM-Equity AG at the beginning of October. The transition is subject to additional Know-Your-Customer (KYC) procedures, Binance added, noting that all share tokens listed on Binance.com are products that are issued and sold by Germany-based CM-Equity.
Hong Kong Securities Commission warns against share token purchases on Binance
Binance’s decision coincides with a growing number of regulators voicing concerns that the exchange is offering tokenized stocks without authorization, among other products and services. The list includes regulators in Italy, Lithuania, the UK, Japan, and Germany, where the Federal Financial Supervisory Authority Bafin said earlier this year that tokens associated with stocks in companies like Tesla represent securities if they can be transferred and traded a Cryptocurrency exchange.
Hong Kong’s Securities and Futures Commission (SFC) was the latest agency to issue a warning about Binance. On Friday, the regulator said it was “aware that Binance has been offering trading services in equity tokens in a number of jurisdictions and is concerned that those services may also be offered to Hong Kong investors.” The SFC stressed that “no Binance group company is licensed or registered to conduct ‘regulated activities’ in Hong Kong.”
The Commission stated that stock tokens are likely to be “securities” within the meaning of the Securities and Futures Regulation of the Chinese Special Administrative Region. And if this is the case, they should be subject to the regulatory mandate of the SFC.
The regulator warned that the marketing and distribution of such tokens, “whether in Hong Kong or as a destination for Hong Kong investors,” is a “regulated activity” and requires a license. Anyone who sells share tokens in the city without registration can be prosecuted, stressed the Securities Commission and urged potential investors to be “extremely careful” when buying share tokens on unregulated platforms.
How do you assess the current regulatory pressure on the Binance crypto exchange? Let us know in the comments section below.
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