The cryptocurrency exchange Binance launched its zero-commission tradable stock token. The aim was to bridge the gap between the cryptocurrency market and Wall Street. However, since BaFin, Germany’s top financial regulator is against it. BaFin warned that Binance might get fined for not offering securities tokens without actually issuing investor prospectuses.
Binance claims to be the world’s largest cryptocurrency exchange by trading volume. It allows its users to trade a full range of cryptocurrency derivatives, including futures and options.
Binance announced it will allow users to trade tokenized shares of Tesla and Coinbase Global on its native cryptocurrency, BUSD. On Monday, April 26, Binance also announced it would provide investors in companies such as Microsoft, MicroStrategy, and Apple Inc. with exposure to other tokenized securities.
However, on Wednesday, April 29, the regulator said that Tesla, MicroStrategy, and Coinbase’s prospectus were not on the exchange’s website.
BaFin said Binance’s actions violated EU securities laws and could get fined for 5 million euros. It is equivalent to 3% of the company’s turnover last year.
As Binance’s stock token offering is under scrutiny by regulators, the exchange said it would comply with any requirements.
Binance stated that its stock tokens would enable global investors to obtain financial benefits from the stock performance and dividends. Although Binance stock tokens allow investors to purchase a portion of actual shares, no company has sponsored these tokens. In addition, investors holding Binance stock tokens will not vote in real corporate affairs.
Binance’s platform will still be accessible via Internet Protocol addresses in the UK and Germany on Wednesday afternoon. Binance’s main stock token trading website said that only listed residents in China, the U.S. and Turkey are prohibited from using the service.
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