Tuesday, June 22, 2021

BaFin rejects Binance’s appeal to remove its warnings about stock tokens.

The Takeaway:

The German securities regulator BaFin has rejected an appeal from cryptocurrency exchange Binance to remove its warnings about the firm's stock tokens.

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The German securities regulator BaFin has rejected an appeal from cryptocurrency exchange Binance to remove its warnings about the firm’s stock tokens, which it argues could constitute a breach of German securities laws. The Federal Financial Supervisory Authority, or BaFin, recently posted a notice to its website criticizing Binance for its stock tokens, which the regulator believes should have been accompanied by a published prospectus after prior approval.

 

Binance has until this week to remove its tokens from sale in German.

As part of enforcement action led by BaFin against the crypto exchange giant, Binance has until this week to remove its tokens from sale in Germany or face a fine. According to local laws, the maximum fine could run to $6 million, or 3% of annual revenue. The regulator could also hold Binance liable for any losses incurred by investors in its stock tokens. According to the Financial Times reports, Binance is currently lobbying the regulator to change its mind, arguing that BaFin has fundamentally misunderstood the nature of its offering, which would render the warnings inappropriate.

 

Binance maintains these tokens are not securities. 

According to the Financial Times reports, the crypto exchange giant is currently lobbying the regulator to change its mind, arguing that BaFin has fundamentally misunderstood the nature of its offering, which would render the warnings inappropriate. However, for now, at least, the financial regulator appears to be holding fast, suggesting that the failure to publish investment prospectus documents constitutes “a criminal offense.”

The crypto exchange giant Binance has maintained that the stock tokens are not securities in their own right because they are not transferable to other exchanges or customers, and they are transacted through a third party. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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