Binance Stops Selling ‘Stocks Tokens’ After Hong Kong SEC Issues a Warning
The Securities and Futures Commission (SEC) of Hong Kong issued a warning on Friday against the leading cryptocurrency exchange, saying Binance is not licensed to sell “stock tokens” in the city.
Tokenized stocks are digital assets that are backed by the underlying listed traditional stocks. The regulator notes that Binance offers trading services in these “Stock Tokens” in several jurisdictions and is now concerned that they may also be offered to Hong Kong investors.
“The SFC wishes to make it clear that no entity in the Binance group is licensed or registered to conduct ‘regulated activity’ in Hong Kong.”
The markets watchdog further said that such tokens are “securities” in the city under the Securities and Futures Ordinance (SFO). As such, marketing and distributing them is a “regulated activity” that requires a license from the SEC unless an applicable exemption.
Thomas Atkinson SFC Executive Director of Enforcement.
“The SFC does not tolerate any violations of the securities laws and will not hesitate to take enforcement action against unlicensed platform operators where appropriate.”
Hong Kong plans to bring in legislation requiring all crypto exchanges in the city to be licensed. While exchanges can apply to be licensed by the SFC, they are not required to at present.
According to Binance, it currently does not operate in Hong Kong and continues to engage with regulators and law enforcement.
Earlier on Friday, the exchange said it would stop selling the products.