
- The changeย has takenย immediateย effect, and stock tokensย areย no longerย availableย forย purchase.ย
- Users who currently possess stock tokens may hold them over the next 90 days,ย but will be forced to sell them by October 14ย at the latest.ย
- European users can transfer their assets onto CM-Equity AG once the new portal has been established, estimated to be two to four weeks prior to the final sell date.
As the most utilizedย and adored cryptocurrency exchange in the world,ย Binanceย has been receivingย some seriousย scrutiny.ย Around the world,ย Binanceย hasย facedย aย streamย of challenges and restrictions from governments and regulatorsย alike.ย ย
It didnโt take longย for them toย feel the effects.ย
Sponsored
Binanceย recentlyย announcedย that itย isย dropping stock tokens and will no longerย facilitate theirย tradeย on its platform.ย
The companyย previouslyย launched stock tokens in Aprilย this year,ย allowingย customers to buy representations of stocks,ย butย without having to pay commission fees,ย for five publicly traded companies: Apple, Coinbase, Tesla, Microsoft and MicroStrategy.ย Binanceย had offered the tokens through a partnership with CM-Equity AG, a licensed investment firm based in Germany. But itย hasย all come crashing down.ย
The Reasons Whyย
Binanceย announced inย aย blogย postย that the decision wasย madeย withย the aimย ofย shifting itsย commercial focus to other product offerings.ย It isย so farย unclear whetherย this reflectsย theย exchange’sย true motive.ย
In April, Germanyโs financial watchdog,ย theย Federal Financial Supervisory Authority (BaFin),ย began heavily scrutinizingย the product andย informedย investors that it had โreasonable groundsโ to believe thatย Binanceย hadย violated the countryโsย lawsย onย securitiesย whenย launching its stock token offerings.ย
Regulators in Japan, Canada, Thailand, Great Britain and Italy have also issued warningsย concerningย Binance.ย
According toย Thomas Atkinson,ย the SFCโs executive director of enforcement,ย
โInvestors should be wary of the risks of trading virtual assets on an unregulated platform.ย If the platform ceases operation, collapses, or is hacked, investors may face the possible risk of losing their entire investments held on the platform.โ
Indeed, the company nowย potentially facesย fines for not publishing investor prospectuses for the instruments.ย
The main dilemma here is:ย whyย isย Binanceย retreating? Is because of all the previous warnings from regulators?ย Or is it because the provider decidedย thatย their tradeย doesnโt bring enoughย profitย toย justify continuation?ย
It is unclear whether global regulators coordinated their moves, which have placed overwhelming global pressure onย Binance.ย
DailyCoin reached out to Binance for further comment but did not receive a response by press time. However, DailyCoin is actively working to gather more information and provide an update on the story.
Whatย Does It Mean forย Binancers?ย
The changeย wentย intoย immediateย effectย and stock tokensย are no longer available for purchase.ย Binanceย usersย with currentย stock tokenย holdingsย can sell orย retainย themย forย the next 90 days,ย according toย the exchange, but will no longer be able to sell or close positionsย from October 15th.ย
European usersย have the option toย transferย their positions onto CM-Equity AGย once the new portalย has beenย established, which is estimated to beย two to four weeks prior to the sell date.ย ย
On The Flipside
- Binanceย hasย come underย serious scrutiny over the past few months,ย but the company has shown its strength,ย making sharp decisions under pressure. In the pastย thisย has beenย aย major contributingย factor for its impressiveย survival andย growth.ย
- Whetherย Binanceย can survive this regulatory onslaught depends on the strength ofย itsย leadership. The sheer size ofย Binanceย and its global reach will alsoย play aย vitalย part.ย ย
- Binanceย hasย stated thatย they are committed toย movingย the crypto ecosystem forward.ย