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Binance ditches 'stock tokens' as global crackdown widens

  • Major exchange Binance stops selling stock tokens
  • Hong Kong latest regulator to target exchange
  • Lithuania c. bank also warns Binance over unlicensed services
  • Global scrutiny on platform is unprecedented.
Published July 16, 2021

LONDON: Binance said on Friday it had stopped selling digital tokens linked to shares, as Hong Kong's financial watchdog became the latest in a string of regulators to crack down on the cryptocurrency exchange platform's "stock tokens" offerings.

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.

"Effective immediately, stock tokens are unavailable for purchase on Binance.com," the exchange said on its website, adding it would cease all support for the products in October.

Global scrutiny of the cryptocurrency sector has grown amid worries over lax consumer protection and the use of digital coins for money laundering, with authorities in recent months zeroing in on Binance, one of the world's biggest platforms.

Crypto exchange Binance unauthorised, says Italian regulator, as crackdown widens

Hong Kong's Securities and Futures Commission (SFC) said after Binance's move that the exchange was not licensed to carry out regulated activities in the city. Offering stock tokens to the Hong Kong public without authorisation could be an offence it added.

"Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions," the SFC said.

A Binance spokesperson declined to comment on the SFC's move, which came a day after Italian regulators made a similar announcement.

Binance does not currently have exchange operations in Hong Kong and takes its legal obligations seriously, the spokesperson added.

It was not immediately clear whether global regulators have coordinated their moves, which have created unprecedented global pressure on a major cryptocurrency firm.

Binance, the world's biggest exchange by spot trading volumes last month, offers a wide range of services to users, from cryptocurrency spot and derivatives trading to digital wallets and stock tokens.

Britain bans Binance in latest cryptocurrency crackdown

It was offering tokens for companies including Apple Inc , Microsoft Corp and Tesla Inc.

Later on Friday, Lithuania's central bank said it had warned Binance about its "unlicensed investment services". Consumers risk losing all their investments on crypto-asset related services, it said.

GLOBAL CRACKDOWN

Regulators in Britain, Germany, Japan and some other countries have stepped up warnings over Binance, with the United States also reportedly investigating the exchange.

Italy's market watchdog on Thursday said Binance was not authorised to provide investment services and activities in the country. Its website has offered information in Italian on products including stock tokens.

Britain's Financial Conduct Authority (FCA), which last month said Binance could not carry out regulated activities, declined to comment on whether it had been in contact with other regulators.

Pakistan moves to bring cryptocurrency boom out of the dark

The FCA routinely cooperates and shares information with regulators globally on a range of issues, a spokesperson said.

BaFin, the German regulator, said in April that Binance risked being fined for offering stock tokens without publishing an investor prospectus.

Binance users holding stock tokens can sell or hold them over the next 90 days, the exchange said, but will no longer be able to sell or close positions after Oct. 14.

"We believe that shifting our commercial 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," a Binance spokesperson said.

Comments

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samir sardana Jul 16, 2021 10:39pm
Pakistan had 30 Billion USD of remittances in 2021.So the key,is the cost of the remittance. Even 0.1% is 30 million USD.If it is 0.5%,the cost is 150 million USD. Time to bring in PKR Crypto,which should be traded on KSE or at a money changer in Karachi - on line.The Pakistan Crypto will also absorb the PKR NDF market.It can also be used to settle import and export payments ,especially with nations in Africa. Pakistanis will save the dead loss of the cost of remittance,and also get a premium rate in PKR,for their family,as the PKR will NOT appreciate.If 1 million Pakistanis remit 5 Billion USD before EID,the PKR will appreciate,and so,the families in Pakistan will get lesser rupees. So,if they buy the PKR Crypto,in USD,the PKR will remain the same,and when their families cash the Crypto, they will get more PKR,or they can use it for purchases in Pakistan.Also the PKR Crypto will have a cross rate with BTC,so it becomes a global currency.dindooohindoo
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