Binance to cease support for stock tokens
Starting from 14th October, 2021, the Binance crypto exchange will wind down support for stock tokens, as stated on the official website.
Time to move on
“As the crypto ecosystem evolves, and as Binance grows with the community, we are continually evaluating our products and working with our partners to meet our users’ needs,” goes the recent announcement.
The exchange has decided to take this step “to shift [their] commercial focus to other product offerings”. Now users have 90 days to sell their tokens or close their positions. On 15th October, this will happen automatically.
Users residing in the European Economic Area (EEA) and Switzerland are able to transition their assets to the newly-established portal of CM-Equity AG, a German investment company. Binance reported that the new platform will be launched “approximately two-to-four weeks before” 15th October, 2021.
CM-Equity AG founder and CEO, Michael Kott, commented to The Block: “I can ensure you nobody forced them. They decided to do so to focus on other crypto-related products, which is their main business”.
In April, Binance updated its list of stock tokens and added Tesla. Later, the platform opened trading for Coinbase Stock Token and announced a new token listing backed by Microstrategy, Apple and Microsoft equity portfolios.
Watchdogs lashing out at Binance
Some European regulators have expressed interest in this new Binance service. The Financial Times reports that watchdogs in the UK and Germany are verifying its compliance with local legislation.
At the end of April, BaFin warned investors about a possible violation of securities laws by Binance when launching its stock token trading. In June, the Financial Conduct Authority (FCA) banned Binance Markets Limited from performing any regulated activity within the country without the prior written approval.
After that, the banks Barclays and Santander restricted fund transfers to Binance to the UK residents, and Clear Junction, payments solutions provider, refused to process transactions related to the exchange. The Cayman Islands initiated an investigation into Binance operation, Thailand accused the company of operating without a license, Japan issued a warning as well. Poland warned users about the risks of using the platform, Italy and Malta claimed Binance to perform unregulated activities.
Earlier, the exchange ceased delivering services to residents of the Canadian province of Ontario and suspended euro deposits via SEPA bank transfers. According to the Financial Times, Visa and Mastercard have also decided to cease cooperation with the exchange.
Amid heightening tensions, Changpeng Zhao, Head of Binance, published an open letter where he revealed Binance plans to combat compliance concerns and protect users.
Binance stock tokens holders have been informed they have 3 months to close all their positions, since the exchange is now aimed at moving on to other spheres and products. This sudden announcement attracted excessive attention from regulators all over the world, resulting in new restrictions and clampdowns.
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