- Binance has announced that it has stopped selling stock tokens.
- The decision comes after increased scrutiny from financial regulators.
- Users who hold stock tokens have 90 days to sell them or move their holdings.
BINANCE UNDER FIRE: Following strict scrutiny from financial regulators, Binance has put a stop to its selling of stock tokens. The largest crypto exchange said that it will halt stock tokens so that it can focus on “other product offerings.”
A notice on Binance.com states:
Effective immediately, new stock tokens are unavailable for purchase on Binance.com, and Binance.com will no longer support any stock tokens after 14 October 2021
Binance said it will halt the stock tokens so that it can focus on “other product offerings.”
These stock tokens were in essence just tokenized versions of popular equities such as Tesla, Facebook, Google, Coinbase, and others. To list them on its platform, Binance partnered up with German investment firm CM-Equity. The same company has also worked with FTX Exchange and Bittrex with similar stock token services.
Binance only launched the service in April but faced hindrance from financial regulators. For instance, BaFin stated in April that they believe the stock tokens violated securities laws. The agency is the German financial authority for regulation.
To add to this, both UK and German regulators noted that Binance did not file a prospectus before rolling out its stock tokens. The UK’s Financial Conduct Authority has also launched an investigation to inquire about the nature of these tokens.
Following the notice by Binance, Hong Kong’s Securities and Futures Commission warned consumers that Binance is not “licensed or registered” to offer these types of tokens. Hong Kong Law recognizes them as securities. Not just this but Italy’s financial regulator Consob announced too that Binance isn’t authorized to offer any investment services or activities in the country. They also mentioned stock tokens.
For now, Binance users who hold stock tokens have 90 days to sell them. Otherwise, they can move their holdings to a portal CM-Equity will launch soon. They’ve announced that it will launch the portal by October 15, this year.
Due to its title of the largest crypto exchange globally, it’s no surprise that Binance has long been targeted by regulators. Just its size and number of users internationally is enough invitation to focus on its operations. In the last 24 hours, the exchange has hosted more than $14 billion in trading volume. Its closest competitor, Coinbase, processed only $1.5 billion.