Germany's financial regulator, the Federal Financial Supervisory Authority (also known as BaFin), has issued a warning to Binance over its tokenized shares.
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According to an official statement, the cryptocurrency exchange faces risks of being fined offering security-tracking tokens without first publishing an investor prospectus.
The regulator said it did not find any prospectus on the exchange’s website for the tokenized stocks. Thus, the watchdog believes Binance violated European Union securities law.
"BaFin has grounds to suspect that Binance Germany is selling shares in Germany in the form of ‘share tokens’ without offering the necessary prospectuses," the regulator said.
BaFin's accusation comes after Binance announced listing of tokens backed by a portfolio of real stocks of MicroStrategy (MSTR), Apple (APPL), Microsoft (MSFT) to the platform. The tokenized investment products are available alongside the stablecoin BUSD during the traditional trading session. The tokens allow investors to buy fractions of stocks.
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