Binance halts the trading of stock tokens

Binance revealed that they will halt trading of its stock tokens, as Binance received multiple warning from regulatory authorities. Users have to settle their trades before 14th October. 

On Friday, Binance revealed that they will be ceasing trading of its stock tokens and the Users of will not be able to purchase any stock tokens.

The Exchange explained that before October 14, the existing holders of stock tokens must settle their stock tokens. If the holders failed to settle their tokens by 14 October, on 15th October, the positions of their stock token will be automatically closed.

Hong Kong Regulatories

According to news, On Friday, Hong Kong Securities and Futures Commission (SFC’s) warns Binance is unauthorized to perform “regulated activity” in the city, specifically in the case of 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

~ SFC Regulators

Additionally, the regulators stated

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

In April 2021, Binance started its stock tokens trading service and gave five stock tokens: Apple, Coinbase, Microsoft, MicroStrategy, and Tesla. The aggregate trading volume was around $1 million.

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Binance provided the service, With the German financial services firm CM-Equity. Binance said

Those users may transition their stock token balances to CM-Equity AG once its new portal is established. The portal is scheduled to be open approximately two to four weeks before 2021-10-15 (UTC), and additional KYC measures will be requested by CM-Equity AG to complete the transition

The reason is not clear, why Binance halts its stock token trading but the official announcement on the Binance website, clearly written that “we believe shifting our commercial focus to other product offerings will better serve our users.”

Also Read: Bishijie To Shutdown It’s Crypto News Service Due To Chinese Regulation