Binance Is Unauthorized To Sell Stock Tokens, Hong Kong Regulator Says

Hong Kong’s Securities and Futures Commission (SFC) said on Friday said that Binance, one of the world’s largest cryptocurrency exchanges, was not licensed to sell stock tokens products in the city. In its statement, the Securities and Futures Commission also stated that no entity in the Binance group was registered to carry out a regulated activity in Hong Kong.

Hong Kong’s Securities and Futures Commission blew the whistle on Binance’s stock tokens and expressed concern that they could be offered to Hong Kong’s investors. Stock tokens are digital versions of equities pegged to the value of the relevant share. They are usually bought and sold in fractional units, unlike traditional equities.

The Securities and Futures Commission said that the stock tokens were likely to be ‘securities’ and as such distributing or marketing them constitute a regulated activity that requires a license from the Securities and Futures Commission. Offering the stock tokens in Hong Kong, either to Hong Kong’s investors or to the Hong Kong public, without authorization was, therefore, an offense.

Thoman Atkinson, the Securities and Futures Commission’s Executive Director of Enforcement said that the commission would not tolerate any violations of the securities law, and would not hesitate to take enforcement action against unlicensed platform operators where appropriate.

Honk Kong securities law mandate all cryptocurrency exchanges in the city to be licensed. Hong Kong also wants cryptocurrency exchanges in the city to only offer services to professional investors who have in-depth knowledge of the risks and whatnots of investing.

In a separate statement, Binance announced that it is discontinuing its stock token service, ending the sale of the tokens immediately and ceasing support for those already purchased in October.

The announcement by Hong Kong’s Securities and Futures Commission comes after a string of similar warnings from regulatory bodies in Thailand, the U.K, Japan, Germany, and the United States. About two weeks ago, Thailand’s Securities and Futures Commission filed a  criminal complaint against Binance on claims that it was operating a digital asset business without a license. Binance is banned in the UK by the Financial Conduct Authority (FCA) which said Binance is not permitted to undertake any regulated activity in the UK. Japan regulators also mentioned that the exchange was operating in the country illegally. In April, German regulators mentioned that the exchange risked being fined for offering tokens connected to stock. The crypto exchange was also under investigation by the U.S. Justice Department and Internal Revenue Service in May.

Bitcoin has also suspended customers from making deposits using the Single Euro Payments Area (SEPA) schemes.

Binane currently operates the world’s biggest bitcoin exchange and altcoin crypto exchange by volume. Last month, Binance was the world’s biggest exchange by spot trading volumes, with trading volumes reaching $668 billion.

Previous Post

Xiaomi Corp. Overtook Apple Inc. in Q2 As The World’s Second-largest Smartphone Vendor

Next Post

Ethereum Co-founder Anthony Di Iorio Is Quitting Crypto Out Of Personal Safety Concerns

Related Posts