German regulator warns Binance over stock tokens

Platform News: BaFin Germany

Germany’s financial regulator, BaFin, warned that Binance, one of the world’s largest cryptocurrency exchanges, risked being fined for offering security-tracking tokens without first publishing an investor prospectus.

On Monday, Binance announced it would offer tokens, denominated in the exchange’s own cryptocurrency, giving investors exposure to MicroStrategy, Microsoft and Apple.

These joined tokens representing Tesla and Coinbase that were already trading.

But the regulator said on Wednesday there seemed to be no prospectus on the exchange’s website for the MicroStrategy, Tesla and Coinbase issues, a violation of European Union securities law that could result in Binance, as issuer, being fined 5 million euros (approximately $6.04 million) or 3% of last year’s turnover.

“BaFin has grounds to suspect that Binance Germany is selling shares in Germany in the form of ‘share tokens’ without offering the necessary prospectuses,” it said.

“Please bear in mind that securities investments should only ever be carried out on the basis of the necessary information,” it added.

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It was unclear if prospectuses were available for the other traded tokens.

Binance had no immediate comment on the announcement.

The team at Platform Executive hope you have enjoyed this news article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Thomas Escritt in Berlin. Additional reporting by Tom Wilson in London. Editing by Matthew Lewis.

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