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Binance's Allegedly Illegal Stock Tokens Draw Ire of German Financial Watchdog

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Wed, 04/28/2021 - 17:58
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Alex Dovbnya
Regulators are not happy about Binance venturing into tokenized stock trading
Binance's Allegedly Illegal Stock Tokens Draw Ire of German Financial Watchdog
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Leading cryptocurrency exchange Binance has been warned about "probably" violating security laws by Germany’s financial regulator after listing several stock tokens, the Financial Times reports.  

The Federal Financial Supervisory Authority (BaFin) claims that the crypto giant could face a fine of up to €5 million for failing to issue a prospectus for its securities, which is a criminal offense.   

Binance’s new offering could be ultimately banned in Germany.        

Apart from BaFin, the stock tokens are also being scrutinized by the Financial Conduct Authority (FCA) in the U.K.

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Commission-free stock trading  

As reported by U.Today, Binance made a foray into tokenized stock trading earlier this month. It currently allows users to get zero-fee exposure to four publicly traded companies: Tesla, Coinbase, MicroStrategy, and Apple. It will also list the stock token that tracks the performance of Microsoft later this month.

The tokens could be purchased with the Binance USD (BUSD) stablecoin during U.S. trading hours.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.