Binance Crypto Exchange Halts Stock Tokens As Regulators Turn

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Binance cryptocurrency exchange logo displayed on a smartphone with stock market percentages in the background.

Omar Marques | SOPA Pictures | LightRocket via Getty Images

Binance will no longer offer digital versions of stocks like Tesla, Apple and Coinbase as the cryptocurrency exchange faces increasing pressure from regulators around the world.

The world’s leading digital currency exchange by trading volume said in a blog post on Friday that it would end support for “stock tokens,” crypto assets tied to the value of certain stocks.

Binance had offered the tokens as part of a partnership with CM-Equity AG, a licensed investment firm based in Germany. According to Binance, each token was fully backed by shares held by CM-Equity AG.

Binance said the stock tokens were not available for purchase on its website, “effective immediately.” The company will stop supporting all stock tokens after October 14, and users will be able to sell or hold them for the next 90 days.

European users will be able to transfer their holdings to a new “portal” at CM-Equity AG approximately two to four weeks before Binance closes all positions on October 15, Binance said.

The company said the decision was made to “shift our business focus to other product offerings.”

“As the crypto ecosystem evolves and Binance grows as a business, we continually evaluate our products and work with our partners to meet the needs of our users,” a Binance spokesperson told CNBC.

“We take our legal obligations very seriously and work with regulators and law enforcement. We do not comment on specific questions or inquiries.”

In April, the German financial watchdog warned investors that Binance likely broke securities rules with the launch of its stock tokens, adding that the company was facing fines for failing to publish a prospectus. investor for instruments.

Binance’s stock tokens allow users to buy a fraction of the shares of publicly traded companies without paying a commission. The proposed actions included Apple, Coinbase, Microsoft, MicroStrategy and Tesla. Prices were settled in the company’s own stablecoin, Binance USD.

Binance faces growing crackdown from regulators around the world. Last month, the UK market watchdog banned the company from providing regulated services in the country, while the Italian securities regulator said Thursday that Binance was not authorized to provide services in the country. investment to Italians.

Regulators in Japan, Canada and Thailand have also issued warnings regarding Binance.

Last week, Binance CEO Changpeng Zhao, known in the crypto industry as “CZ,” said his business “still has a lot of room to grow” and that “compliance is a problem. journey “in the emerging digital asset market.

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