A lot of multinational compliance agencies are having regulatory issues with Binance. Some of these issues hinge on the way the platform provides stock tokens – what some find quite unlawful.
In lieu of this, Binance announced on Friday that the platform will be “winding down its support” for stock tokens. What does this mean?
The users can no longer buy stock tokens on Binance. This has been implemented immediately that Friday. And by October 14, the platform would plug out support for stock tokens after 19:55 (UTC).
Therefore, the firm urged those who are still holding some stock tokens to sell them before the above date. After which, the platform will close every trading position.
For context, stock tokens are fractions of shares users buy from their respective public traded companies. For example: stocks in Microsoft, Tesla, Coinbase, and Apple. And from a legal perspective, it’s only a licensed platform that can render this service.
Having said that, it’s good we note that Binance was offering this product because it was backed by shares of a German asset management company: CM-Equity AG, Germany. They partnered up.
Now, Binance is offering an option to its users to “transition” to CM-Equity AG as they will soon have their portal. However, this option is only available to the users in the European Economic Area.