Cryptocurrency exchange Binance announced that it is ceasing support for stock tokens. “Effectively immediately, stock tokens are unavailable for purchase on Binance.com,” according to their website.
Existing stock tokens holders should sell their holding before October 14, said the exchange. If they do not sell by the date, their stock token position will automatically close on October 15.
Binance advises that users who currently hold stock tokens should “sell or hold them over the 90 days.”
There is no reason behind the sudden delisting. Still, Binance has stated it plans to “shift our commercial focus to other product offerings” and “remain committed to moving the crypto ecosystem forward.”
Hong Kong Warning
After a few hours, the news came ahead of the Hong Kong Securities and Futures Commission (SFC’s) warning. Binance does not have the license required to conduct “regulated activity” in the city, specifically for offering stock tokens.
“In Hong Kong, Stock Tokens are likely to be ‘securities’ under the securities and Futures Ordinance (SFO) and if so, they are subject to the regulatory remit of the SFC,” said the regulator.
“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 licence from the SFC unless an applicable exemption applies,” the regulator added.
Binance started offering the service via German Financial service firm CM-Equity in April. CM-Equity AG is establishing its own portal to support users residing in the European Economic Area (EEA) and users in Switzerland.
“Those users may transition their stock token balances to CM-Equity AG once its new portal is established,” said Binance. “The portal is scheduled to open approximately two-to-four week before 2021-10-15(UTC), and additional KYC measures will be requested by CM-equity AG to complete the transition.”
Binance’s stock tokens let users buy a fraction of publicly-traded companies’ shares without paying commission fees. Stocks on offer included Apple, Coinbase, Microsoft, Microstrategy, and Tesla. To settle the prices they used their own dollar-pegged stablecoin, Binance USD.
In June, the Financial Conduct Authority ordered Binance to stop all “regulated activities” in Britain. Regulators in Japan, Canada, Poland, the U.K., and the Cayman Islands have either issued warnings or taken action against Binance.