Crypto exchange Binance has announced it is to cease trading of its stock tokens.
Users of Binance.com are now no longer able to buy stock tokens – which include Apple, Microsoft, Coinbase, MicroStrategy and Tesla – effective immediately.
According to the announcement, the exchange will no longer support any stock tokens after 7.55pm UTC on October 14 2021.
Existing stock token holders are advised to sell their assets before October 14 or their positions will be closed on October 15.
Binance advises that users who currently hold stock tokens should “sell or hold them over the next 90 days”.
No reason was given for the sudden delisting, but Binance has stated it plans to “shift our commercial focus to other product offerings” and “remain committed to moving the crypto ecosystem forward”.
For EEA users, CM-Equity AG is establishing its own portal to support users residing in the European Economic Area (EEA) as well as in Switzerland. Those users may transition their stock token balances to CM-Equity AG once its new portal is established. On Binance, all Stock Tokens are products issued and sold by CM-Equity AG, Germany.
HONG KONG'S SFC SAYS NO ENTITY IN THE BINANCE GROUP IS LICENSED OR REGISTERED TO CONDUCT "REGULATED ACTIVITY" IN HONG KONG
— *Walter Bloomberg (@DeItaone) July 16, 2021
The news does coincide with a warning statement from the Hong Kong Securities and Futures Commission (SFC) that outlines their concerns regarding stock token offerings on Binance. In the statement, SFC stated they were “aware” that Binance offers trading of stock tokens in a number of jurisdictions and were “concerned” that these products were available to investors in Hong Kong.
“The SFC wishes to make it clear that no entity in the Binance group is licensed or registered to conduct “regulated activity” in Hong Kong,” the regulator said.
“In Hong Kong, Stock Tokens are likely to be ‘securities’ under the Securities and Futures Ordinance (SFO) and if so, they are subject to the regulatory remit of the SFC.
“The SFC warns that where the Stock Tokens are ‘securities’, marketing and/or distributing such tokens – whether in Hong Kong or targeting Hong Kong investors – constitute a ‘regulated activity’ and require a licence from the SFC unless an applicable exemption applies.”
Binance has made recent efforts to appease regulators, outlining plans to double the size of the regulatory compliance team, hire more expert regulatory advisors, extend their compliance partnerships and localise business operations to conform to emerging regulatory oversight.
However, Binance has faced regulatory challenges from many jurisdictions. In June, the Financial Conduct Authority ordered Binance to stop all “regulated activities” in Britain. Additionally, In April, Germany’s BaFin also warned Binance had likely violated securities rules with the launch of the tokens.
Regulators in the US, Italy, Japan, the Cayman Islands, Thailand and Poland have also recently issued warnings or taken action against Binance.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.