Crypto Exchange Binance Shuts Down Stock Tokens As Regulators Orbit

The logo of cryptocurrency exchange Binance displayed on a smartphone with the word “canceled” on a computer screen in the background.

Budrul Chukrut | SOPA images | LightRocket via Getty Images

Binance no longer offers digital versions of stocks like Tesla, Apple and Coinbase, as the cryptocurrency exchange is under increasing pressure from regulators around the world.

The world’s best digital currency exchange by trading volume said in a blog post Friday that it would end support for “stock tokens”, crypto assets linked to the value of certain stocks.

Binance had offered the tokens through a partnership with CM-Equity AG, a licensed investment firm based in Germany. According to Binance, each token was fully backed by shares of CM-Equity AG.

Binance said stock tokens were not available for purchase on its website, “effective immediately”. The company will end support for stock tokens after October 14, and users will be able to sell or hold them for the next 90 days.

European users will be able to move their positions to a new “portal” of CM-Equity AG about two to four weeks before Binance closes all positions on October 15.

The company said the decision had been made to “shift our commercial focus to other product offerings”.

In April, Germany’s financial watchdog warned investors that Binance had likely violated securities rules with the launch of its stock tokens, adding that the company faced potential fines for failing to publish investor prospectuses for the instruments.

“As the crypto ecosystem evolves and Binance grows as a company, we are constantly evaluating our products and working with our partners to meet the needs of our users,” a Binance spokesperson told CNBC.

“We take our legal obligations very seriously and work with regulators and law enforcement officers. We do not comment on specific matters or questions.”

Binance’s stock tokens allow users to buy a fraction of the shares of publicly traded companies without paying any commission. Shares offered included Apple, Coinbase, Microsoft, Microstrategy and Tesla. Prices were settled in the company’s own dollar-pegged stablecoin, Binance USD.

Binance has faced a growing crackdown from regulators around the world. Last month, the British market watchdog prohibited the company from performing regulated services in the country, as Italy’s securities regulator said on Thursday that Binance not authorized to provide investment services to Italians.

Regulators in Japan, Canada and Thailand have also warned against Binance.

Last week, Binance CEO Changpeng Zhao – known in the crypto industry as “CZ” – said his company “still has a lot of room to grow” and that “compliance is a journeyin the nascent digital asset market.


Leave a Comment