There are chances for Binance to face heavy fines due to over-stroke tokens as the exchange failed to publish all the relevant accompanying documents and the recent launch of stock tokens.
Binance tried to bridge the gap between the traditional market and cryptocurrency space in the form of fractionalized stock tokens. However, BaFin, a German financial regulator, got attention towards this attempt.
The Federal Financial Supervisory Authority (BaFin) warns that the world’s largest cryptocurrency exchange could face heavy fines.
Because it launched security tracking tokens without providing any accompanying investor prospectus. Binance launched these fractionalized stock tokens for Microstrategy, Apple, and Microsoft on April 26.
Moreover, Binance added these tokens at Coinbase and Tesla that launched earlier in the month. Additionally, the exchange employed a German equity firm called GM-Equity AG to hold its underlying securities depository portfolio.
Moreover, Binance claims that the firm provides complete financial backing for the tokens. According to the regulator, Binance failed to give an investor prospectus for both stock tokens it launched.
$6 Million Fine
Since it is a violation of European Union Securities Law, this could result in Binance facing a 5 million euros ($6 million) fine.
Additionally, BaFin has suspected that Binance is selling some shares in Share tokens in Germany without offering any necessary prospectus.
Regulatory added that all the security investments should be carried out based on the essential information. Though Binance was contacted, no reply was given by the time of Publication.
Jessica Jung
Jessica Jung, the spokesperson, told Bloomberg earlier that the exchange has intentions to comply with its several jurisdictional regulatory requirements.
Thus, it would take steps to give remedy to the matter. She further added that Binance takes all compliance obligations very seriously.
Moreover, Binance commits to following the local regulator requirements they operate. Jung further said that they work with regulators to address all the questions that they may have.
