The world’s largest cryptocurrency exchange operator, Binance Holdings Ltd, is no longer selling digital tokens linked to shares such as Tesla Inc. and Apple Inc. after multiple regulators expressed their concerns about the products.
“We will be winding down support for stock tokens on Binance.com to shift our commercial focus to other product offerings,” Binance explained in a blog post. “Effective immediately, stock tokens are unavailable for purchase on Binance.com.”
The company added that those holding stock tokens will have 90 days to sell them off. The closure of the platform is slated for October 15. Some users who want to keep their tokens will be able to do so through a soon-to-be-launched portal, which will only be available to residents of the European Economic Area.
Binance unveiled the digital tokens in April but has since faced global scrutiny from a string of regulators. The latest to warn investors about the tokens is Hong Kong’s Securities and Futures Commission, which said Binance wasn’t licensed to carry out regulated activities in the city. The Commission added that unauthorized offerings of stock tokens to Hong Kong residents can be treated as an offense.
“Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions,” Hong Kong’s financial watchdog said.
Regulators in other countries like the United Kingdom raised similar concerns with crypto traders growing increasingly anxious about their investments.
The launch of stock tokens at Binance was a response to a similar move from its competitor Coinbase. Stock tokens are tokenized versions of actual stocks – Tesla and Apple being the most notable – and each represents a share or a fraction of a share. They were backed by BUSD, Binance’s own stablecoin, along with shares from German-based firm CM-Equity AG. Unfortunately, these tokens were never popular enough for bitcoin gambling sites and were mostly used as a speculative currency.