Binance Holdings Ltd., the world’s largest cryptocurrency exchange operator, said it would stop offering digital tokens tied to stocks such as Apple Inc. in Tesla Inc.
Stock tokens on Binance will not be available for purchase immediately, the crypto exchange posted on its website on Friday. Buyers who own the tokens can sell them in the next 90 days, and Binance will no longer support the products on October 14, the stock exchange said.
“We believe that shifting our commercial focus to other product offerings will serve our customers better in the long run,” a Binance spokesman said.
Binance’s move came when regulators around the world stepped up pressure on crypto exchange. Some agencies have exposed Binance’s stock tokens for violating local securities regulations.
The Hong Kong market regulator became the latest regulatory body on Friday, alerting investors to Binance’s share tokens.
“Investors are urged to be very careful if they intend to invest in equity tokens offered on unregulated platforms,” she said in the Hong Kong Securities and Futures Commission.
Stock tokens are likely to be defined as securities under territorial law, meaning they can only be marketed or distributed by licensed companies, the commission said. Binance is not licensed to conduct regulated financial activities in Hong Kong.
Italian stock market regulator Consob issued a similar warning on Thursday. Consob said in a statement that Binance is not authorized to provide investment services in Italy, citing the offer of a crypto exchange of stock tokens and derivatives.
Earlier this week, Binance founder Changpeng Zhao said in an open letter that the gearbox is expanding its compliance group. “We are committed to complying with relevant local regulations wherever we operate,” he said.
Regulators in Poland and Lithuania have also issued warnings about Binance in recent days following similar warnings from British and Japanese authorities in June.
The German market supervisor BaFin said in April that the related company Binance may have violated securities laws by issuing share tokens, while not publishing prospectuses on securities offers that BaFin could review.
Binance unveiled stock chips in April, starting with the one related to Tesla. Binance said the tokens were backed by a portfolio of underlying securities held by German financial firm CM-Equity AG. The stock exchange has restricted tokens for U.S. investors, who are generally not allowed to trade in the main overseas market, Binance.
Binance, founded in 2017, is the largest crypto exchange in the world in terms of trading volume and performs tens of billions of dollars in transactions daily.
There is a lot of this in cryptocurrency derivatives – risky instruments that allow traders to bet on whether different coins will rise or fall. Some regulators, such as the UK financial authority, have cited derivatives in recent warnings about Binance.
Binance was founded in China and now says it has no official headquarters.
This story was published from a wire agency source without any text changes.
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