Europe Takes a Focus on Binance’s Products!
According to the latest information, the latest products offered by the crypto currency exchange Binance to its users are being scrutinized by European regulators. Based on the information obtained, digital stock tokens representing fractions of stock shares, such as Tesla and Coinbase offered by the exchange, began to be investigated by European and British regulators for possible incompatibilities with securities laws.
Under the Spotlight of Binance
According to the report shared by the Financial Times, regulators are concerned that tokens will not provide enough transparent corporate disclosures. In particular, they are allegedly concerned about the possibility of not providing an investment certificate that would be required if tokens are considered securities.
In addition, the German Federal Financial Supervisory Authority (BaFin) said in a statement that they could not comment specifically on the incident and said, “Basically, if tokens are transferable, can be traded on a crypto exchange, and are equipped with economic powers such as dividends or cash payments, they represent securities and are subject to the obligation to issue a certificate. ” used the expressions.
Binance ‘s stock tokens allow investors to buy as little as one percent of the stock represented by a digital token without actually having to buy it in full or own a physical stock certificate. The product was developed in conjunction with the fully regulated Munich-based investment group CM-Equity AG and Switzerland-based asset tokenization platform Digital Assets AG, which also handles token trading.
In response to regulators’ scrutiny, Binance said the tokens are an official CM-Equity product that complies with the European Union’s Mifid II market rules and BaFin’s banking regulations. According to the statements made, CM-Equity manages the custody of the purchased shares and the compliance and KYC rules for the product.
Binance, on the other hand, said in a statement on the subject, “Currently, users only buy and sell tokens from CM-Equity AG, which does not require a certificate.” using his words.
Binance also highlighted that stock prices for tokens in Tesla and Coinbase are traded in Binance USD (BUSD) instead of the traditional currency.