Binance, the world’s largest crypto exchange by trading volume, has stopped support for stock tokens on its platform.
What Happened: In an announcement on Friday, the crypto exchange said it was winding down support for stock tokens on Binance.com to shift its commercial focus to other product offerings.
“Effective immediately, stock tokens are unavailable for purchase on Binance.com, and Binance.com will no longer support any stock tokens after 2021-10-14 19:55 (UTC),” stated the announcement.
Users holding stock tokens will also be required to sell them within the next 90 days, after which they will no longer be able to manually sell or close their positions.
Why It Matters: The leading crypto exchange launched tokenized versions of popular stocks like Tesla Inc TSLA, Apple Inc AAPL, and Microsoft Corporation MSFT in April this year.
“Now, you can access both cryptocurrency and traditional stock markets, all from the comfort of your Binance account,” said the exchange at the time.
“We are making it possible for users to trade fractions of a unit of publicly tradable equities, turning them into more affordable units that have lower barriers of entry.”
However, regulators across the world weren’t convinced that the move was entirely legal and alleged that Binance might have violated securities laws.
Why It Matters: Over the past few weeks, more and more regulators across the world turned up the heat on the crypto exchange, disrupting its operations in several geographies.
Most recently, Hong Kong’s Securities and Futures Commission (SFC) issued a notice to investors stating that no entity in the Binance group is licensed or registered to conduct “regulated activity” in Hong Kong.
Read also: Traders Worldwide Sue Binance Over Losses During Service Crash In May
“The SFC warns that where the Stock Tokens are “securities,” marketing and/or distributing such tokens – whether in Hong Kong or targeting Hong Kong investors – constitute a “regulated activity” and require a license from the SFC unless an applicable exemption applies,” stated the notice.
“Investors are urged to be extremely careful if they plan to invest in Stock Tokens offered on unregulated platforms.”
Price Action: At press time, Binance’s native crypto token Binance Coin BNB/USD was trading at $308.93, down 1.65% over the past 24-hours.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
