Various jurisdictions, including Hong Kong and Lithuania, have issued warnings to Binance for trading in stock tokens for which it is not licensed to conduct such “regulated activity”.
On July 16, Binance announced that the exchange has halted selling its digital tokens that were linked to shares of companies, known as “stock tokens” that could be purchased for shares of publicly traded companies including Apple Inc, Microsoft Corp, and Tesla Inc.
Stock tokens are now unavailable for purchase on Binance.com, and they will no longer support any stock tokens after October 14, 2021. Binance users holding stock tokens can hold them over the next 90 days, but will not be able to sell positions after that date.
Today, we are announcing that we will be winding down support for stock tokens on Binance.com to shift our commercial focus to other product offerings.Binance
UK, Japan, Germany, Hong Kong, Lithuania Issue Warnings
The decision comes against the backdrop of an ongoing regulatory crackdown, with Hong Kong becoming the latest to declare “no entity in the Binance group is licensed or registered to conduct ‘regulated activity’ in Hong Kong”.
The list includes regulatory bodies in Italy, Lithuania, the UK, Japan and Germany issuing warnings that the crypto exchange is not licensed to be offering regulated services in their markets.
Binance has been under the microscope of various regulators, one of the reasons being that it is by far the largest crypto exchange, handling the majority of trade volume. As Binance offers a wide range of services, from cryptocurrency spot and derivatives trading to digital wallets and staking, regulators want to keep an eye out and make sure no laws are broken.
Some products and services are offered by Binance.com within Australia, but not by Binance Australia (BAU) which is the operating company within Australia. Crypto News Australia contacted Binance.com to comment on the matter:
Just like to first clarify that stock tokens are sold and issued by CM-Equity AG. It was a commercial decision to cease support for stock tokens on Binance.com. As Binance grows as a part of the community, we are continually evaluating our offerings and we believe that shifting our focus to other product offerings will better serve our users, and we are committed to making this transition as straightforward as possible for those affected.
We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion. We don’t comment on specific matters or inquiries.Binance spokesperson
Crypto Regulation Is a Journey
In a letter by Binance CEO Changpeng “CZ” Zhao, he stated that compliance is a “journey” and that most of the applications of DeFi have not yet been put into law or regulatory frameworks. However, CZ added that Binance is committed to putting more systems in place to protect its users, and to work with law enforcement and regulatory bodies.
More regulations are, in fact, positive signs that an industry is maturing, because this sets the foundation for a broader population to feel safe to participate in crypto […] When the car was first invented, there weren’t any traffic laws, traffic lights or even safety belts. Laws and guidelines were developed along the way as the cars were running on the road.Changpeng “CZ” Zhao, Binance CEO
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