Friday, July 30, 2021

Binance halts its controversial Stock Token service following global regulatory pushback.

The Takeaway:

Binance announced to stop selling digital tokens linked to shares following regulatory crackdown from several countries, including the UK and Hong Kong.

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Binance announced on Friday that it has 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. “Effective immediately, stock tokens are unavailable for purchase on Binance.com,” the exchange announced on its website. Stock tokens are digital versions of equities pegged to the value of the relevant share.

 

Regulators had issued multiple warnings to Binance. 

Global scrutiny of the cryptocurrency sector has grown amid worries over lax consumer protection and the use of cryptocurrencies for money laundering, with authorities in recent months targeting Binance, one of the world’s leading platforms. Earlier, Hong Kong’s Securities and Futures Commission (SFC) said Binance was not licensed to carry out regulated activities in the city. Offering stock tokens to the Hong Kong public without authorization could be an offense, it added. “Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions,” the SFC said.

 

Regulators in Britain, Germany, and Japan also issued warnings to Binance. 

It is not clear whether global regulators preemptively coordinated their moves, which created unprecedented global pressure on a major cryptocurrency exchange. Regulators in Britain, Germany, Japan, and some other countries also stepped up warnings over Binance, with the United States reportedly investigating the exchange’s operations. Earlier this week, Italy’s financial watchdog said Binance was not authorized to provide investment services and activities in the country. Its website has offered information in Italian on products, including stock tokens. Now the crypto exchange has unequivocally announced to stop Stock Token services, adding it would cease all support for the products in October.

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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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