While crypto exchange Binance continues to face crackdowns from several different countries, it’s looking likely that stock tokens may be behind this.
Hong Kong And Lithuania Become The Latest To Crackdown On Binance
On Friday, Hong Kong’s market regulator, the Securities and Futures Commission (SFC), warned the crypto exchange in a press release.
The commission says that it’s concerned about Binance’s stock tokens service, which may be used by Hong Kong investors.
The SFC adds:
The SFC wishes to make it clear that no entity in the Binance group is licensed or registered to conduct “regulated activity” in Hong Kong.
Related Reading | Crypto Exchange Binance Blocks SEPA Transfers, Stops Euro Deposits
The Hong Kong regulator further clarifies that in Hong Kong, these stock tokens are likely to be considered as “securities” under the Securities and Fund Ordinance (SFO). This means that they are subject to the regulatory remit of the SFC.
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.
Lithuania also joined Hong Kong on the same day in issuing warnings to the crypto exchange. The nation’s central bank raised concerns about Binance’s “unlicensed investment services”.
The Bank of Lithuania’s notice reads:
The Bank of Lithuania has warned a virtual currency exchange operator Binance, UAB about its unlicensed investment services provided in Lithuania and ordered the company to ensure that its publicly available information is not misleading.
These announcements come after several other countries have already issued similar warnings to the crypto exchange. These include the likes of UK, Canada, and Japan.
Italy’s financial regulator also called Binance “unauthorized” just a couple of days ago.
The Crypto Exchange Discontinues Stock Tokens
Binance has announced that the crypto exchange will no longer be providing services related to stock tokens.
The sale of the tokens has ceased immediately. And the platform will only continue to provide support for tokens already purchased until October.
Related Reading | Gemini Exchange Sticks The Boot In As Regulatory Woes Pile On For Binance
While it has been just 3 months since the crypto exchange started providing these tokens, Binance says it’s ending support to focus on other products.
The decision to discontinue these tokens could mean that they might be the source of the exchange’s recent problems.
Hong Kong’s SEC also directly referenced stock tokens as their main cause of concern.
At the time of writing, Bitcoin‘s price floats around $31.5k, down 6% in the last 7 days. While the value of the crypto seems to be down 18% compared to one month ago.
Here is a chart showing the trend in BTC’s price:
BTC's price seems to be on a downtrend | Source: BTCUSD on TradingView
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July 18, 2021 at 02:00AM
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Are Stock Tokens Behind The Crackdown On Crypto Exchange Binance? - bitcoinist.com
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