Binance's Stock Tokens May Violate Law, Germany’s Financial Watchdog Says - CoinDesk (coindesk.com)
Germany’s Financial Supervisory Authority BaFin has warned investors the cryptocurrency exchange Binance may have violated European securities rules with the launch of its stock tokens.

  • In an announcement Wednesday, BaFin said the Binance stock tokens tracking the movement of shares in Tesla, Coinbase and MicroStrategy have been identified as “suspicious” and require a prospectus that wasn't issued prior to trading.
  • BaFin said the cryptocurrency exchange has violated the prospectus obligation under Article 3 Paragraph 1 of the European Prospectus Regulation.
  • According to BaFin, the violation of the prospectus constitutes an administrative offense and can be punished with a fine of up to €5 million ($6 million) or 3% of Binance’s annual revenue.
  • Elsewhere red flags have already been raised by Hong Kong law firms regarding the Binance stock tokens launched earlier this month.
  • On April 22, the Financial Times reported that U.K.'s regulator, the Financial Conduct Authority, is “working with the firm [Binance] to understand the product, the regulations that may apply to it and how it is marketed.”
  • The stock tokens allow Binance customers to purchase as little as one-hundredth of a regular share using Binance USD (BUSD), a U.S. dollar stablecoin issued by the exchange.
  • Binance was contacted for comment, but didn't immediately respond at the time of publication.
Read more: Binance’s Tesla, Coinbase Stock Tokens Under Scrutiny From UK Regulator: Report
    • 1
    Francisco Gimeno - BC Analyst Binance is always working with the "let's do it and ask for sorry for later". But the situation is different now. The EU and Uk for instance are already looking at all things crypto and tokens with regulations. In fact, if anyone needs to launch a token or crypto product there better be prepared to ask for all permits and check al the ticks on regulations.