LONDON (Reuters -Binance announced Friday that it has stopped selling digital tokens linked with shares. The announcement came as Hong Kong’s financial watchdog was the latest regulator to clamp down on the “stock tokens” offerings on the cryptocurrency exchange platform.
Stock tokens can be described as digital versions of equities that are tied to the share’s value. They can be bought and sold in fractional units, unlike traditional equities.
“Effectively, stock tokens cannot be purchased on Binance.com,” said the exchange in https://www.binance.com/en/support/announcement/3a0304f3ee1c43668959c1b01f610d59. It also stated that it would end support for the products by October.
Due to concerns over the lack of consumer protection and the use of digital coins for money laundering, global scrutiny has increased. Authorities have recently focused on Binance, one of the largest platforms in the world.
The Securities and Futures Commission of Hong Kong (SFC), stated Friday https://apps.sfc.hk/edistributionWeb/gateway/EN/news–and-announcements/news/doc.refNo=21PR76 Binance wasn’t licensed to conduct regulated activities within the city. It could also be a crime to offer stock tokens to Hong Kong citizens without authorization.
The SFC stated that anyone who violates a relevant provision could be prosecuted and, if found guilty, subject to criminal sanctions.
The Italian regulators had made a similar announcement the day before.
It wasn’t immediately clear if global regulators had coordinated their actions, which has created unprecedented global pressure upon a major cryptocurrency company.
Binance, which was the largest spot trading exchange in the world, provides a variety of services, including cryptocurrency spot and derivatives trading, digital wallets, and stock tokens.
It offered tokens to companies such as Apple Inc., Microsoft Corp., and Tesla Inc.